Volume Analysis | Flash Market Update 5.30.23
The Generals (Nasdaq 100) continue to charge higher, advancing through formerly bearish territory. However, the troops (Russell 2000) are still in retreat. With the NDX 100 making up a preponderance of the equity weighting within the S&P 500, it is not surprising to see both Capital Weighted Volume and Capital Weighted Dollar Volume surging higher. Specifically, $54 Billion flowed into the S&P 500 and $39 Billion flowed out.
Despite the surge in the NDX price index up 3.25%, the SPX price index only finished up 0.28%, the Dow Jones Industrials closed down -0.65% and the troops (Russell 2000) closed down -1.18% for the week. Also, the number of stocks making new highs in the Russell 3000 fell again this past week. Moreover, the NYSE Advance-Decline Line dropped further below its trend line.
The resolution in a bifurcated market with the generals (NDX 100) advancing higher on positive capital flows with the troops declining lower has typically been for the generals to “rally up” or pull up the rest of the broad market not receiving capital flows. However, the market is providing many mixed signals, and this could go either way. On a positive note, the S&P 500 just broke through and closed above the 4200 resistance mark. Yet, the next resistance is close at hand @ 4225. A close above 4225 would solidify the 4200 breakout.
Grace and peace my friends,
BUFF DORMEIER, CMT®
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