After eight sessions of flat action, the iShares Russell 2000 Index (IWM) has broken to the upside. The most interesting aspect of Tuesday's action here is that there's really no news to account for it. There have been no fresh developments on the fiscal-cliff negotiations, for instance -- but market players may be optimistic about a friendly Federal Reserve announcement, which is scheduled for Wednesday.
The big problem for the bears right now is that, until we are closer to the fiscal-cliff deadline, there won't be any downside action related to these debates. There isn't yet any urgency to the negotiations, so no one is taking any of the politicians' comments seriously. They are posturing and trying to create some pressure through the news coverage, but the market hasn't registered any reaction that lasts longer than a few minutes.
Keep in mind, as well, that the politicians are eager to head home for the holidays -- which means the real deadline for an agreement is probably Christmas Eve. If there is no deal by then, it'll mean a substantial rise in the chances of going over the cliff, so it's at that point that I'd start looking for the market to react negatively.
Still, this two weeks away, and until then there is little potential for negative news -- and that is what's keeping a bid under the indices as money managers to try to pick up some performance. This will change as Christmas approaches, but at the moment it's the bears who have to worry.