Volume Analysis | Flash Market Update – 8.17.26

Broadening Holds Formation

Last week, in my interview with Quasar Markets, I suggested it would be a healthy development if the S&P 500 consolidated after a bullish but modest volume breakout. This week followed that script as the market largely traded sideways in a narrow range, digesting recent gains rather than surrendering the field.

The headline advance was modest, with the SPDR S&P 500 ETF Trust finishing up 0.40%. Yet the internal leadership structure remained constructive. The Schwab U.S. Dividend Equity ETF led the major formations higher, advancing 1.83%. The Invesco S&P 500 Equal Weight ETF gained 1.22%, the iShares Russell 2000 ETF rose 1.17%, and the Invesco QQQ Trust Series 1 advanced 1.11%.

This was not a generals-only advance. The brass commanders, the belly of the market, and the troops not only participated but led the ranks higher. In the spirit of our And Then There Were None framework, the list of advancing units did not narrow this week. It yet again broadened.

Volume, however, remained less decisive. S&P 500 Capital Weighted Volume was below average, with 54% of volume to the downside. Similarly, 52% of Capital Weighted Dollar Volume registered as outflows on low Capital Weighted Dollar Volume. In other words, price held firm, but the supply lines did not deliver a full resupply convoy. The bulls held the field, but capital commitment was not overwhelming.

This is consistent with the central theme from the Second Half Volume Analysis Outlook. Price can rise for a time on momentum, but volume is the fuel required to sustain the climb. In the Outlook, https://kingsviewim.com/2026/07/22/volume-analysis-2026-second-half-market-outlook/ we emphasized that price represents testimony, while volume helps confirm whether that testimony is backed by conviction. Volume remains the force of the market, and when it fails to lead price, the advance deserves continued inspection.

Weak volume in a consolidation pattern is expected. However, the accumulated trends of Capital Weighted Volume and Capital Weighted Dollar Volume remain important. Both have stabilized from recent pressure but have not yet delivered a decisive new thrust. This keeps the campaign constructive, but not fully confirmed. The Outlook warned that volume and capital flow trends had been the greatest concern, with price advancing faster than sponsorship. That concern has eased somewhat, but has not disappeared.

The most encouraging field report continues to come from breadth and broadening. The NYSE Advance Decline Line remains near new high territory, reinforcing the idea that the market is no longer being carried solely by mega cap command. In the Outlook video we described this as the evolution from And Then There Were None to And Then There Were Some, with broader participation becoming one of the bright spots of 2026.

The campaign no longer appears dependent on one elite command. Rather than being pulled higher by the generals alone, the advance is now supported by a stronger core across the broader ranks. That is an important development. The Invesco S&P 500 Equal Weight ETF, the iShares Russell 2000 ETF, and the Schwab U.S. Dividend Equity ETF are all helping carry the formation. This broadening does not remove risk, but it does improve the quality of the advance.

The generals, represented by the Invesco QQQ Trust Series 1, continued to advance but did not dominate the week. This matters because leadership concentration eventually becomes its own risk. As noted in the Outlook, when too much capital crowds into the same names for the same reasons, the question becomes less about whether the companies are good and more about whether expectations have outrun sponsorship. This week, the generals moved forward, but every other command unit made all-time new highs.

Cross asset signals remain tied to the Iran war and the Strait of Hormuz. Recent reporting continues to describe a fragile and unsettled backdrop, with U.S. and Iran talks around Hormuz stalled, renewed regional attacks pressuring energy markets, and oil volatility tied to uncertainty over shipping routes and supply risk. The conflict remains a military and economic pressure campaign, with both sides attempting to force concessions without losing leverage.

Oil remained volatile in that environment. The energy front has not fully broken, but it has not regained clear command either. That fits the yin and yang relationship we have been tracking between technology and energy.  In the Outlook, we noted that technology and energy have increasingly acted as opposing forces during 2026, with peace talk optimism often favoring technology while renewed conflict risk tends to support energy. This past week XLK finished up on the week 1.13% with XLE up 7.65%. This relationship remains important as the market enters the seasonally vulnerable late summer stretch.

Gold and silver continue to deserve attention as well. After recently testing support, both metals remain tactically important. Silver remains particularly notable because, as we discussed in the Outlook, it is not only a precious metal but also a critical industrial metal tied to artificial intelligence infrastructure. The commodity scouts have not yet sounded a decisive shofar, but they remain active on the perimeter.

Overall, this week’s message was one of healthy consolidation with improving breadth but incomplete volume confirmation. The bulls did not lose ground. The broader ranks strengthened. The brass commanders advanced. The troops held formation. The generals moved forward but did not monopolize command. That is a constructive broadening profile.

The volume report counsels patience. Below average Capital Weighted Volume, modest downside skew in share volume, and slight outflows in Capital Weighted Dollar Volume suggest healthy consolidation after last week’s breakout.

Risk Command

This week was constructive, but it was not an all-clear. A sideways consolidation after a breakout can be healthy, especially when broader participation continues to improve.

Investors should consider remaining aligned with the broadening trend while maintaining risk discipline. Position sizing, diversification, support awareness, and confirmation from Capital Weighted Volume and Capital Weighted Dollar Volume remain essential. If breadth continues to make new highs and capital flows turn more decisively positive, the bulls may regain stronger command. If volume remains weak while price continues higher, the rally may again be advancing on vapors.

For now, the army remains on the field. The generals are regrouping, the troops are advancing, the brass commanders are strengthening, and the belly of the market is providing a stronger core. But in markets as in war, victory is not declared by price alone. It is confirmed by participation, capital commitment, and the ability to hold ground when the next counterattack arrives

Grace and peace,

BUFF DORMEIER, CMT

Updated: 8/17/2026. 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.