Stock exchange traded funds indexed to the S&P 500 and other major benchmarks have broken free of their recent trading range, raising hopes for a year-end rally

The S&P 500 has climbed above 1236, which is the level of the so-called Fibonacci 50% retracement point from the high in July and the recent low point touched earlier in October. Surging above this point is certainly encouraging for bulls. [Top of the Trading Range]

We did not see strong volumes however at any point in the past week, where volumes were average to below average at best, even amidst options expiration on Friday.

Despite the stock rally, SPDR S&P 500 ETF (NYSEArca: SPY) saw outflows of nearly $3 billion over the week, as did iShares Russell 2000 (NYSEArca: IWM) on the small cap side, and other large cap broad based products including PowerShares QQQ (NasdaqGM: QQQ) and SPDR Dow Jones Industrial Average (NYSEArca: DIA) mostly saw inflows.

The iShares S&P 500 (NYSEArca: IVV), on the other hand, saw substantial net inflows, and it is possible that institutional managers are engaging in swaps from one ETF to another going into year’s end.

From a sector standpoint, retail was unquestionably in play as SPDR S&P Retail (NYSEArca: XRT) took in over $100 million which is nearly one third of the total asset level in the fund. It is not unusual for the sector to be active this time of year given the upcoming post Thanksgiving and pre-December holiday season shopping spree which is a major driver for many of the equity names within the index.

We also point to strong price performance on heavier volumes in financials, specifically with Financial Select Sector SPDR (NYSEArca: XLF) closing at its highest level since mid September. [Financial ETFs Need to Lead]