In last week’s edition of Volume Analysis Weekly we stated, “For the bulls to neutralize the bears momentum they need to push the bears back to their own 3725. The bulls would then need to advance the ball past SPX 3900 to breakout of bearish territory. A move to 4200 would give the bulls not only control of the ball but momentum to test further levels.” The SPX 500 closed this week @ 3752 negating the momentum previously held firmly by the bears.

Although price now has neutralized the bears momentum, the same cannot be said about our leading indicators, capital flows and volume. Although capital flows were up for the week, they failed to break corresponding resistance, closing the week below 39,811. Whereas capital weighted volume actually had outflows for the week despite strong price gains. The bulls would like to see the leading indicators lead price higher or at the very least confirm price’s upward movement. However, volume is outright contradicting price action while capital flows are not confirming price. This weakness does put a damper on the price gains the bulls achieved last week.

Grace and peace to you my friends,
Buff Dormeier

Updated: 10/24/2022

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