In last week's Russell 2000 note it was pointed out that it seemed probable that the index had settled into a new trading range after a very strong move higher in November. This past week has been further confirmation of that new range, which can be defined as being largely bound by a low at the 1360 area and a high at the 1385 area. Holiday trading can distort normal relationships, but so far it would appear traders are content to build a base and defend support rather than being concerned with pushing shares to new highs.

The index, therefore, is not likely to head anywhere until that behavior changes. For the past week, sector performance saw few standouts in either direction. Energy, Financials, Consumer Non-Cyclicals, and Utilities were the gainers on the week in descending order. Moves were not large with the top end being a gain of no more than 1.3%. On the downside, Health Care and Basic Materials were the biggest losers. Other sectors were negative, but on a fractional basis. In sum, the unified momentum of past weeks has faded and traders and investors have become far more selective. The process has been index to sector to names in terms of what has been chased.