Volume Analysis | Flash Update – 8.31.26

Broadening Pause, Generals Assume Command

This week’s battlefield staged a broadening pause as generals attempted to reassume command. The S&P 500 Index advanced 0.40%, but the path was not clean. The index kissed 7770 resistance on Friday, August 28th, before backing off. Price held firm, but participation was uneven.

The key event came Thursday, Nvidia’s earnings report day, when the S&P 500 recorded the highest Capital Weighted Volume day so far this quarter. Upside Capital Weighted Volume accounted for 74% of the day’s volume, while 75% of Capital Weighted Dollar Volume registered as inflows. That was the week’s strongest artillery barrage from the bulls thus far Q3.

For the full week, Capital Weighted Volume was average, with upside and downside volume also near average. Upside volume led with 52% of Capital Weighted Volume. Capital flows were slightly better, with 54% of weekly Capital Weighted Dollar Volume registering as inflows on total flows, inflows, and outflows. The bulls had the advantage, but not a decisive one.

Both accumulated Capital Weighted Volume and Capital Weighted Dollar Volume advanced and are now pushing toward resistance. A breakout in these supply lines would be welcomed by the bulls, but the bears have successfully defended this ground thus far. This remains the central tension from the Second Half Volume Analysis Outlook. Price has improved faster than sponsorship, and volume remains the fuel required to sustain altitude.

The NYSE Advance Decline Line fell for the second consecutive week and closed near its weekly low, but it still holds its uptrend line. This pullback does not negate the broader participation story, but it does say the troops are not marching in perfect formation. As discussed in the Outlook, the market remains in a transition tape, with leadership rotating, dispersion rising, and selectivity becoming increasingly important.

The generals, represented by the Invesco QQQ Trust Series 1, advanced 0.42% and staged the strongest command response among the major units. However, the generals still closed inside last week’s range. Their next resistance is near 735, with critical support near 685. That 685 level remains especially important. Intermediate support remains near 655 and major support in the 600 to 575 zone.

The troops, represented by the iShares Russell 2000 ETF, declined -1.40% and need to hold 290 to maintain their short-term uptrend. The lieutenants, represented by the Invesco S&P 500 Equal Weight ETF, declined -0.44% but held within last week’s range. The brass commanders, represented by the Schwab U.S. Dividend Equity ETF, paused with a -0.60% decline but held near the upper boundary of the prior week’s range.

Overall, the generals, who drove much of the market’s initial 2023-2025 advance before recently giving up some command, attempted to reassert themselves. However, they could not pull the broader market with them. In the spirit of And Then There Were None, this was not a battlefield collapse. It was a rotation check. The generals advanced, but the troops slipped, the lieutenants paused, and the brass commanders consolidated.

This is where the broadening story becomes nuanced. Year to date, the Vanguard Morningstar Value Index Fund ETF has returned 19.20%, more than double the 9.14% return of the Vanguard Morningstar Growth Index Fund ETF. Yet this week, growth outperformed value, with the Vanguard Morningstar Growth Index Fund ETF gaining 1.19% while the Vanguard Morningstar Value Index Fund ETF declined -0.49%. The old economy core has carried for much of the year, but this week the new economy generals tried to retake the flag.

That is consistent with the Market Outlook’s message. The next phase may not be about abandoning growth or blindly chasing value. It may be about recognizing whether wider participation can develop across areas that did not lead the prior phase. The VFGU Q3 positioning reflects this same idea, emphasizing broader leadership, improving market breadth, dividend growth, quality companies, international participation, and diversified factor exposure while preserving flexibility through risk controls.

The yin and yang relationship between technology and energy also continued. The Technology Select Sector SPDR Fund advanced 1.30%, while the Energy Select Sector SPDR Fund declined -1.51%. In last week’s commentary, we noted that oil had reached midpoint resistance. This week, NYMEX crude stumbled, breaking beneath last week’s range intraweek but closing slightly above the low end of the range. Oil appears to be consolidating. Short term, crude needs to hold a weekly close above 88 to maintain its short-term uptrend and 82 on an intermediate basis.

The Iran war remains central to the energy front. Recent Reuters reporting noted that oil prices fell as Iran and Oman talks revived hopes of reopening or managing the Strait of Hormuz, including discussion of a temporary navigational corridor and mine clearing. AP also reported Iran and Oman discussions over managing Hormuz traffic, while broader tension remains elevated. Meanwhile, Iran has threatened retaliation against countries cooperating with new U.S. sanctions, keeping the military and economic pressure campaign alive. In battlefield terms, the energy front is not resolved. It is moving between ceasefire hope, sanctions pressure, and shipping route risk.

Gold and silver also deserve attention. Early in the week, gold rallied toward 4800 resistance but quickly reversed, with silver following suit. Both have rallied significantly since bouncing off their mid July support levels. Silver is nearing short-term resistance between 70 and 73, while gold has resistance near 4700. Much of the commodity strength may have been tied to the weaker U.S. Dollar Index, which correspondingly rallied back this week after earlier breaking support. Silver remains particularly important because, as noted in the Outlook, it is not only a precious metal but also a critical industrial metal tied to artificial intelligence infrastructure.

From a leadership standpoint, Nvidia Corporation remains one of the key generals to watch. Thursday’s earnings response sent the stock surging back toward 230 resistance on heavy volume. However, Friday gave back those gains on strong, but lighter, volume. Nvidia now has important resistance near 230 and support near 208. This range may carry significance for the generals’ future flight path.

The broader message is one of selective resilience. Price is consolidating gains on a light-volume pullback. Breadth pulled back but remains above trend. The generals attempted to retake command, but the broader army did not fully follow. Value continues to lead growth year to date, but growth reasserted itself this week. Technology and energy continue to trade in opposing formation. The strength and weakness of the dollar has inversely correlated with precious metals.

This may not be a simple bull or bear tape. It appears to be transition tape. The question remains whether the market is broadening with sponsorship or rising on selective bursts of enthusiasm. The Second Half Outlook framed this well. The practical question is not merely whether one is bullish or bearish, but where participation is improving, where volume is confirming, and where price may be running ahead of sponsorship.

Risk Command

This week improved the generals’ posture but did not deliver an all-clear signal. Capital Weighted Volume and Capital Weighted Dollar Volume advanced, yet both remain near resistance. The S&P 500 moved nearer to resistance, but backed off. Breadth weakened for a second consecutive week, though it remains in trend. The troops and lieutenants held ranges, while the brass commanders consolidated near highs.

A disciplined risk management approach remains the proper command posture. Investors should respect the rally, but not chase it without confirmation from volume, capital flows, and breadth. If the Invesco QQQ Trust Series 1 holds 685 and pushes through 735, the generals may regain stronger command. If the iShares Russell 2000 ETF holds 290, the broadening thesis may remain intact. If Capital Weighted Volume and Capital Weighted Dollar Volume break through resistance, the bulls gain stronger evidence of institutional sponsorship.

If those confirmations fail, especially during the seasonally vulnerable late summer and early fall window, defensive positioning should take priority over prediction. For now, the generals have advanced, but the broader army remains mixed. In markets as in war, the goal is not to win every skirmish. It is to defend critical ground, follow the flow of capital, and manage risk before it manages you.

Grace and peace,

BUFF DORMEIER, CMT

Updated: 8/31/2026. 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.