Positive signals from the last-minute budget negotiations raise expectations that an agreement will be reached in time to dodge the fiscal cliff. The major American stock indices gradually gained momentum on Monday as it began to appear that the fiscal cliff would be avoided.  With each news update, more progress was being made.  As a result, many pundits discussed their expectations that the budget negotiations would be resolved before the deadline. As of 2:22 EST, the Dow Jones Industrial Average advanced 55 points (0.43 percent) to 12,993.  The S&P 500 Index rose 0.77 percent to 1,413 (NYSEARCA:SPY).  The 50-day moving average has been an important support level for the S&P 500.  As the chart (at left) indicates, the S&P 500 has now popped back above its 50-day moving average of 1,411.  The Relative Strength Index has inched back up to 47. (Chart courtesy of  Stockcharts.com )  The Nasdaq Composite jumped 1.23 percent  to 2,996 (NASDAQ:QQQ).  The Russell 2000 Index surged 1.08 percent to 841 (NYSEARCA:IWM).   Vanguard Ends 2012 with a Bang, Cuts Fees on 22 ETFs The “Dollar Bull” Index ETF (NYSEARCA:UUP) advanced 3 cents (0.11 percent) to 21.81 as of 1:39 EST.   Under the Hood: An Unheard of Bank ETF As of 1:25 EST, the S&P 500 Volatility Index – or VIX – fell 10.56 percent to 20.32  and the VIX Short-Term Futures ETN declined 4.06 percent to 33.99 (NYSEARCA:VXX). Trading on the major European stock exchanges concluded early on Monday in observation of New Year’s Eve.  The Euro STOXX 50 Index finished Monday’s session with a 0.35 percent advance to 2,635.  The STOXX 50 is staying above its 50-day moving average of 2,554 as well as its March 19 high of 2,608 (NYSEARCA:VGK).  The FTSE 100 Index declined 0.47 percent to 5,897 (NYSEARCA:EWU).  The Frankfurt Stock Exchange was closed for New Year’s Eve (NYSEARCA:EWG).  France’s CAC 40 Index advanced 0.58 percent to 3,641 (NYSEARCA:EWQ).  Spain’s IBEX 35 Index declined 0.45 percent to 8,167 (NYSEARCA:EWP).  Italy’s Borsa Italiana stock exchange was also closed for New Year’s Eve (NYSEARCA:EWI). As of 1:29 EST, the euro declined 0.15 percent against the dollar, trading at $1.3196 (NYSEARCA:FXE). On London’s ICE Futures Europe Exchange, February futures for Brent crude oil advanced by 34 cents (0.31 percent) to $110.96/bbl. (NYSEARCA:BNO, NYSEARCA:USO). February Gold futures advanced by $20.10 (1.21 percent) to $1,676.00 per ounce (NYSEARCA:GLD). ETF Summary:  SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA)  +0.46%   as investors feel confident that the fiscal cliff will be avoided. SPDR EURO STOXX 50 ETF (NYSEARCA: FEZ )  +1.56%  making an absurdly more exaggerated advance than the Euro STOXX 50 Index (which rose 0.35 percent) as American investors feel optimistic about the last-minute budget negotiations. Industrial Select Sector SPDR ETF (NYSEARCA:XLI)  +0.81%  following the increase in the Dallas Fed’s Texas Manufacturing Outlook Survey production index, which rose to 2.7 in December from November’s 1.7. iShares Barclays 20+ Year Treasury Bond Fund (NYSEARCA:TLT)  -1.75%  as advancing stock prices cause investors to become less risk-averse, making the safe haven of government bonds less attractive.  Learn More About iShares ETFs . SPDR S&P 500 INDEX ETF (NYSEARCA:SPY)  +1.05%  as the likelihood of success in the budget negotiations gives investors more confidence about the new year. Bottom line:  As progress in the last-minute budget negotiations raises anticipation that the fiscal cliff will be avoided, investors are taking advantage of the opportunity to get in on the rally before it hits full throttle. Sign up for Wall Street Sector Selector’s FREE Stock Market Timing Indicator!    Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector’s Disclaimer , Terms of Service , and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.