CHIEF TECHNICAL ANALYST, BUFF DORMEIER, CMT^Ⓡ

The generals, Invesco QQQ Trust (QQQ), led the march lower this week (-2.90%), while our brass commanders, Schwab US Dividend Equity ETF (SCHD, -0.58%) and Invesco S&P 500 Equal Weight ETF (RSP, -1.35%), once again held up relatively better on light volume. The bulls took charge at the start of the week, registering a 96% capital-weighted upside volume day on Monday, 3/24. However, much of those gains were nullified by a 92% downside day on Wednesday, 3/26. The bears decisively closed out the week, notching a 98% downside volume day on Friday, 3/28. Meanwhile, the trends of Capital Weighted Volume and Dollar Volume continue to decline in their confirmed downtrends.

A common question currently being asked is whether the market is in a correction phase or a bear market. Although there are differing definitions, my volume analysis viewpoint stems from a capital flow and liquidity perspective. About a month ago, we entered a volume analysis correction when capital weighted volume fell beneath trend. Last week, on 3/21, we entered a volume analysis minor cyclical bear market when capital flows also fell below trend. However, one bright spot remains: liquidity. Defined by the advance-decline line, liquidity remains slightly above trend, protecting us from a major bear market. It is a rare occurrence when liquidity trails capital flows, so I am generally curious to see how this one will play out. The strength of the advance-decline line may signal that although the Nephilim have fallen, there may still be pockets of the market holding strong. These thoughts align well with our “And Then There Were None” theme originating in June, 2024.

After an attempt to break the 5800 resistance earlier in the week, the S&P 500 closed on minor support near 5570. The next minor support level resides at March’s lows around 5500, while stronger long-term support currently sits in the 5250 range. Risk management is often the less traveled path, but a disciplined approach can yield rewards in turbulent times. As we navigate these uncertain waters, it’s essential to remain vigilant and adaptable. The generals may have led the charge lower, but our brass commanders have shown resilience, indicating that not all is lost on this battlefield. The market may be experiencing a mild volume analysis bear market, but the presence of liquidity suggests that there are still strongholds left to defend.

While the generals and troops may be in retreat, our brass commanders still stand relatively firm. The advance-decline line hints at these potential survivors amidst the chaos, reminding us that even in the darkest hours, there can be glimmers of hope. As we move forward, let us keep our eyes on the horizon, prepared to adjust our strategies as the landscape shifts. The journey may be fraught with challenges, but with careful navigation and strategic foresight, we can emerge from this phase stronger and more resilient than before

Grace and peace my friends,
BUFF DORMEIER, CMT®

Updated: 3/31/2025. 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.