Volume Analysis | Flash Update – 3.9.26
Fog of War
Markets entered the week under a cloud of geopolitical uncertainty as open conflict between Iran and Western allies injected a sudden fog of war into global markets. Historically, markets dislike uncertainty far more than conflict itself, and the initial reaction was swift. The week produced two decisive downside engagements. Tuesday, March 2nd registered an 80% downside day on average volume. Friday escalated further with a 93% downside day, again on average volume.
Despite the severity of the headlines and the sharp decline in price, the volume data tells a more measured story. For the full week, Capital Weighted Volume finished essentially balanced with 51% to the downside versus 49% to the upside on average total volume. Capital flows, measured through Capital Weighted Dollar Volume, leaned slightly more defensive with outflows accounting for 53% versus 47% inflows on modestly elevated weekly activity. In other words, while price retreated sharply, the battlefield statistics do not yet suggest wholesale liquidation.
Looking across the units of command, the damage was broad but orderly. The troops, represented by the iShares Russell 2000 ETF, took the heaviest losses falling -4.09%. The S&P 500 equal weight formation, represented by the Invesco S&P 500 Equal Weight ETF, declined -3.29%. The capital weighted lieutenants, represented by the SPDR S&P 500 ETF Trust, fell -1.98%. The generals, represented by the Invesco QQQ Trust, Series 1, declined -1.21%, while the brass commanders represented by the Schwab US Dividend Equity ETF retreated -2.08%.
Importantly, despite the widespread pullback, the commanding units largely held their intermediate defensive lines. The generals briefly broke the 600 support level intraweek but managed to close the week directly on that line. The troops likewise fell deeper during the week yet successfully defended the 250 support zone. From a technical perspective, the broader formations remain within their upward intermediate trends even as the short term battlefield has grown more volatile.
Market breadth, which has been the leading general of this advance for months, finally stumbled. The NYSE Advance–Decline Line declined for the first time in nearly a month, surrendering not only the gains of the past two weeks but slightly more. Even so, the longer term structure of breadth remains constructive and consistent with the broader participation themes discussed in prior weeks.
From a volume perspective, both Capital Weighted Volume and Capital Weighted Dollar Volume continue to hover near their rising long-term averages. Neither has broken down decisively, suggesting that institutional participation remains present even as volatility rises. The market may be distributing shares under stress, but it is not yet showing the type of aggressive liquidation that historically accompanies major trend reversals.
Meanwhile, the geopolitical spark has ignited the commodity front. Brent crude oil surged sharply during the week and is now approaching the key $99 resistance level. Yet even here the volume picture offers an interesting twist. The rally in oil appears to have traveled a considerable distance on relatively modest participation. In other words, oil may have moved too far on too little fuel, pardon the pun, suggesting that the initial reaction may be more emotional than structural, at least in the short term.
Taken together, the battlefield this week reflects a market reacting to shock rather than abandoning its broader campaign. Price retreated sharply, yet volume statistics remain surprisingly balanced. Support levels across the major formations held. Breadth weakened but has not collapsed.
Risk Command
In times of geopolitical conflict, markets often trade on emotion before returning to structure. Investors should monitor whether downside volume begins to expand meaningfully beyond the current equilibrium. Sustained downside participation would signal that distribution is gaining control of the field. Conversely, if support levels in the generals near 600 and the troops near 250 continue to hold while breadth stabilizes, the broader trend may ultimately withstand the current fog of war.
For now, discipline remains paramount. The battlefield has grown more uncertain, but the larger campaign has not yet been decided.
Grace and peace,
BUFF DORMEIER, CMT
Updated: 3/9/2026. Historical references do not assume that any prior market behavior will be duplicated. Past performance does not indicate future results. This material has been prepared by Kingsview Wealth Management, LLC. It is not, and should not, be regarded as investment advice or as a recommendation regarding any particular security or course of action. Opinions expressed herein are current opinions as of the date appearing in this material only. All investments entail risks. There is no guarantee that investment strategies will achieve the desired results under all market conditions and each investor should evaluate their ability to invest for the long term. Investment advisory services offered through Kingsview Wealth Management, LLC (“KWM”), an SEC Registered Investment Adviser.
