Two necessary ingredients for a year-end rally in U.S. stock exchange traded funds are a decisive break above 200-day moving averages and the congressional “supercommittee” reaching a deal on cutting the deficit.

The Nov. 23 deadline looms for the supercommittee, which is charged with devising a plan to save about $1.2 trillion to $1.5 trillion over the next decade for the U.S.

Meanwhile, from a technical perspective, many major indices are testing their 200-day moving averages. [ETF Weekly Recap]

In Washington, members of the supercommittee appear more pessimistic about forging a debt-reduction deal, the Washington Post reports.

If a plan fails to pass, immediate and intense budget cuts will be imposed. [The Technical Picture in S&P 500 ETFs]

“But I think  that this committee is going to have a lot of trouble coming up with a solution that’s going to be ale to find these budget cuts and can do it in a way that they’re all going to be able to sign-off on. The Republicans are still very strongly against any revenue increases, while the Democrats of the panel, I think really want to have those on the table. I think that we saw these bipartisan commissions before notably with the Simpson-Bowles debt commission earlier…”, said Jeremy Glaser, Morningstar markets editor.

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