Volume Analysis | Flash Update: And Now There Are None – 4.7.25
This past week, the market’s price trend finally aligned with its volume trends, which broke down a month earlier. On Thursday, April 3rd, the bears notched a 95% downside volume day on above-average S&P 500 capital weighted volume. This impressive performance was eclipsed on Friday, April 4th, with a staggering 99% downside volume day on high capital weighted volume. For the week, both capital outflows and capital weighted downside volume outpaced inflows and upside volume at a 2:1 ratio on above-average volume. Despite the price destruction, these volume statistics, while bearish, reveal that less harm was done internally than might be perceived on the surface. However, the breakdown in volume and capital flow trends we highlighted last month continues to deteriorate.
Once again, it was the generals, Invesco QQQ ETF (QQQ), and the troops, iShares Russell 2000 ETF (IWM), that led the retreat, both down slightly over -10% for the week. Meanwhile, our brass commanders held up better but still faced heavy losses, with the Invesco S&P 500 Equal Weight ETF (RSP) down -8.34% and the Schwab US Dividend ETF (SCHD) down -8.27% on the week.
Our long-term S&P 500 support level at 5200 was breached on Friday like a hot knife through butter. This former support level (5200) has now become the next resistance point for the S&P 500. The index’s next minor support levels are between 4800-4900, with major trend and horizontal support residing at 4650. The Russell 3000 offers perhaps the clearest view of major support at 2800, where its November 2021 highs align perfectly with its uptrend from the March 2020 lows. The troops (IWM) may find their next support at 163, while the generals’ (QQQ) next support lies near 400.
Our last holdout, liquidity as measured by the NYSE (stocks only) Advance-Decline Line, also broke trend this past week but still appears relatively strong compared to its price counterpart. However, it’s all securities counterpart (NYSE Advance – Decline Line all issues) is still holding trend by a thread. One more item of note: SPY (SPDR S&P 500 ETF) volume surged to levels not seen since January 2022. As noted in earlier reports, this massive SPY volume may indicate a volume sentiment setup for a capitulation bottom. These conditions are once again ripe for the VPCI V bottom setup but have yet to trigger. We will be closely monitoring how this unfolds.
Risk management is often the less traveled path, but it is essential for prudent investors aiming for successful long-term financial outcomes. As we navigate this tumultuous battlefield, let us remain vigilant, strategic, and most importantly tactical ensuring we protect our valuable capital while positioning ourselves for future opportunities.
Grace and peace my friends,
BUFF DORMEIER, CMT
Updated: 4/7/2025. 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.
