Volume Analysis | Flash Market Update 1.17.23

The Bulls had a strong showing last week. The S&P 500’s inflows outpaced outflows by over a 3:1 margin with inflows tallying $61.4 billion compared to only $18.25 billion in outflows. Nonetheless, total capital weighted volume was still slightly below its weekly average.

The big mover these past two weeks has been the advancers of the Advance-Decline Line. The AD Line broke is 40 week average with another strong surge this past week. New Highs are also increasing but still below the intermediate term trend line.

Finally, the S&P 500 is nearing major resistance, at approximately 4000, the apex of the former Bear Flag.

Despite these positive developments, our strongest indicators, Capital Weighted Volume and Capital Weighted Dollar Volume, remain well below trend and near long term lows. With the S&P 500 testing resistance on an Advanced- Decline Line break, this upcoming week could have major implications on the long and intermediate term trend.

Grace and peace my friends.

BUFF DORMEIER, CMT®

Updated: 1/17/23

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