Stock exchange traded funds shook off a tough Thanksgiving and posted their best rally last week since March 2009. The move was fueled by post-holiday buying spirit amidst coordinated action by world central banks early last week, on healthy trading volumes.

Not only did the S&P 500 rise back above its 50 day moving average but it is also once again challenging its 200 day moving average (1264.95 currently), which has provided resistance twice since late October and is a classic example of “old support, providing new resistance.”

The CBOE Volatility Index (VIX), which has been trading at elevated levels for several weeks now with handles in the 30s and 40s, finally declined significantly last week as well, trading as low as $25.29 on Friday before bouncing into the close (found support right near its 200 day moving average).

Exchange traded notes such as XIV were in vogue last week, as investors seemed to be posturing for declining levels of volatility in the near term after “fear” mostly regarding the European debt crisis, clearly has been priced into the market for the past several weeks. Not surprisingly on this latest rally in equities, higher beta sectors have led the way including technology (up 7.20% over the past 5 trading sessions) and financials (rallying 9.67% over the past 5 trading sessions). VXX and TVIX are among the other exchange traded products that track VIX futures.

Once again, the Nasdaq 100 showed signs of leadership and surged above both its 50 and 200 day moving averages. Prior to the pre-Thanksgiving equity selloff, Techs had maintained a 20 plus day streak above its 200 day before losing some steam largely on AAPL weakness.

Year to date, the Nasdaq 100 is up 3.97% versus the S&P 500 down marginally (-0.42%), and AAPL remains a strong leader in this market, up 20.19% year to date. We believe that any sustained rally in the broad U.S. equity markets requires continued leadership from