Volume Analysis | Flash Update – 5.11.26
Sell in May & Go Away?
Since the rally off the March bottom, the bulls were challenged to put up or shut up. This week, they put up on price, and for the first time in this advance, capital flows finally reported to the front.
The bullish party raged on Wednesday, May 6th, as the S&P 500 broke out with a 90% upside day and 92% of S&P 500 Capital Weighted Volume pressing to the upside. For the week, Capital Weighted Volume finished near average, with upside volume above average and downside volume below average. Overall, 67% of weekly Capital Weighted Volume registered to the upside.
Capital Weighted Dollar Volume told a more convincing bullish story. Weekly dollar volume and inflows both finished above average, while outflows were below average. In total, 72% of capital flows registered as inflows. After several weeks of price advancing ahead of confirmation, this week finally brought reinforcements from the capital front.
Among the field units, the mighty generals, represented by the Invesco QQQ Trust Series 1, powered the advance with a surge of nearly 5.48%. Their colonels, represented by the SPDR S&P 500 ETF Trust, followed with a 2.33% gain. The troops, represented by the iShares Russell 2000 ETF, obeyed their marching orders and advanced another 1.76%, closing at new all-time weekly highs. The lieutenants, represented by the Invesco S&P 500 Equal Weight ETF, gained 0.61% but failed to break out. The brass commanders, represented by the Schwab U.S. Dividend Equity ETF, failed to join the celebration, retreating -0.75%.
The most constructive development came from the accumulated volume trends. Since the March low, S&P 500 price had been advancing faster than Capital Weighted Volume and Capital Weighted Dollar Volume. This fact remains and lingers despite the bullish price surge. This lag raises serious questions about the durability of the price breakout. This week, however, both accumulated S&P 500 Capital Weighted Volume and Capital Weighted Dollar Volume broke to new all-time highs. Although trailing, the supply lines have now joined price’s advance.
Breadth, however, remains an unresolved flank. The NYSE Advance Decline Line closed relatively unchanged and remained largely within the prior week’s range. Unlike Capital Weighted Volume and multiple price indexes, breadth has yet to exceed its February all-time highs. This suggests the advance is still being carried primarily by the Nephilim generals and select leadership, while the belly of the market is being pulled along rather than staging its own independent offensive.
Cross asset movements remain shaped by the Iran war backdrop. Oil, represented by NYMEX crude, retreated sharply, losing nearly $15 per barrel on the week and almost $20 at its weekly low. Even so, oil remains within its defining March 13th range. The decline may reflect easing fears around the conflict, but the energy front maintains much of its wartime posture.
Meanwhile, both silver and gold rallied but remain within their pivotal March 20th weekly ranges. The dollar also continued to lose ground from its late March peak. These movements suggest capital is still repositioning across the battlefield as investors assess whether geopolitical pressure is fading or merely regrouping. So where does that leave the “Sell in May and go away” question?
Price has broken out. Volume has now followed. That is constructive. However, from a volume analysis perspective, volume should lead price. In this rally, it trails it. Because volume confirmation arrived after the price breakout, skepticism remains warranted. The advance may still contain elements of the retail trade’s fear of missing out, especially as investors remember missing prior bottoms during last year’s tariff tantrum just a year ago. As rumors of a possible Iran conflict resolution circulate, confidence is building, and investors are moving back into risk assets in anticipation.
Yet the size and character of trading still suggest the big sharks have not fully joined the tiny minnows’ raucous party in the pond. For now, larger institutions appear to be allowing the party to rage without crashing it, but they have not yet fully dived in either. Overall, the list of concerns is narrowing, but has not disappeared. Price has advanced, volume improved. Capital flows have broken out while still relatively diverging. Breadth remains hesitant, and leadership remains concentrated.
Risk Command
This is no longer a weak breakout, but it is not yet a fully broad-based campaign. Investors should respect the new highs and the improvement in capital flows, while still maintaining discipline. Position sizing, diversification, and close attention to breadth and divergence remain critical. For now, the bulls have put up. May will determine whether they can hold ground.
Grace and peace,
BUFF DORMEIER, CMT
Updated: 5/11/2026. 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.
