CHIEF TECHNICAL ANALYST, BUFF DORMEIER, CMT^Ⓡ

The market continued its upward ascent this past week, with the generals once again leading the charge. Yet the broader campaign showed signs of waning fatigue. Volume was light, and participation thinned, suggesting that while leadership remained intact, the ranks behind it were less committed to the current advance.

The generals (Invesco QQQ Trust) pressed ahead, gaining 1.32 percent and pulling their lieutenants (SPY – SPDR S&P 500 ETF) slightly higher by 0.66 percent. However, their equal-weighted counterparts (RSP – Invesco S&P 500 Equal Weight ETF) slipped into slight retreat, closing the week down 0.13 percent. The troops (IWM – iShares Russell 2000 ETF) managed a small advance of 0.32 percent, while the brass commanders (SCHD – Schwab U.S. Dividend Equity ETF) absorbed more meaningful losses, falling 1.06 percent.

This week’s action paints a mixed battlefield. The mega-cap trade has returned to prominence, while broader equity leadership has faltered. Although overall volume was subdued, upside volume and capital inflows still outpaced their downside counterparts by a nearly two-to-one margin. This bullish action continues to push accumulated Capital Weighted Volume and Capital Flows into new all-time highs, well ahead of price.

However, not all signals confirmed the move. The NYSE Advance–Decline Line posted its second consecutive weekly decline, a subtle sign that the market’s earlier broad-based formation can be fragmented. With fewer battalions participating in the charge, the risk of overextension grows.

The generals are still pressing forward, and volume leadership remains intact. Yet the retreat of the brass and stalling of breadth raise tactical concerns. A narrow advance, even when led by strength, carries risk when not supported by the wider formation. Discipline becomes critical as capital flows continue to lead price into new territory. Consider maintaining your position, but with tightened formations. Protect gains, assess exposure, and remain prepared to adjust should the market’s support lines give way. And then there were none left unaware of the terrain ahead.

Grace and peace my friends,
BUFF DORMEIER, CMT®

Updated: 7/21/2025. Historical references do not assume that any prior market behavior will be duplicated.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.