The following is an update of a few of the dollar weighted up-down volume indicators. The $ weighted data is derived by multiplying the closing price times the closing volume of each component member of the given index.
First is the SPX cumulative $ weighted UD volume line making a new recovery high. Typically, the $ weighted UD volume indicators lead price. Their charts are not included in this post, but the SPX cumulative AD and UD volume lines have not exceed their previous highs.
Next is the NDX cumulative $ weighted UD volume line. This $ weighted UD volume variant has some urgent work to do if it is to confirm any near term NDX price high. Not all is well in large cap tech land at the moment. Conversely, the NASDAQ cumulative UD volume line that does not include the NDX components, has broken to an all-time high (chart not included in this post, but trust me, its at an all-time high).
The Russell 2000 (RUT) $ weighted UD volume line (it has achieved new all time highs) is also voting for new price highs in the RUT price index. As with the SPX, the RUT $ weighted UD volume line has only nominally violated its previous high, thus it needs to prove it is serious. The RUT money flow action is telling us selected small caps are still attracting funds.
The RUT $ weighted UD volume MCO is making a valiant attempt to challenge its +50 range. When this indicator climbs to the +40 to +50 levels, it usually signals an initiation thrust, and higher prices typically follow.
Next is the traditional NYA weighted index versus the NYA unweighted index. The unweighted NYA index is a product of a collaborative project with McClellan Financial Publications, although any commentary on this data is mine alone, and not necessarily the same as the McClellan's.
The chart does not clearly reflect it, but the unweighted NYA index nominally broke its all time high Friday, but has not been as strong as its weighted NYA cousin over the past couple of weeks. Since March 2003 bottom,the weighted traditional NYA has rallied from around 4500 to over 7600, but the unweighted NYA has over doubled. However, in the near term, the unweighted NYA has lost its relative strength advantage over the traditional NYA.
Next is the NYA component cumulative AD line composed of the common stocks traded on the NYSE. Fib posts this AD line variant each week, and it has not (yet) confirmed the new NYA price high for the first time since the bull market of 2003 began. Unless the common only AD line catches up in a hurry, the countdown would begin for a more significant price decline than we have seen thus far in the past 2.5 years.
Giving a more positive message is the NYSE component cumulative $ weighted UD volume line. It has confirmed the NYA new price high, but... it lagged by a couple of days, which is uncharacteristic of this indicator, normally it leads price. This could be a warning sign, we'll know going forward.
Last is the NYA component $ weighted UD volume McSum. After correcting to +200, the NYA $ weighted UD volume McSum has turned up, but its MCO, currently at +42, needs to take out the +50 level to indicate an initiation move, likely negating any bearish fish hook in its McSum. Note the $ weighted UD McSum turned up in the same zone as it did in October 2004 and February 2005.
Also take note of the controlling resistance trendline from its June 2003 high and the indicator's failure to touch resistance from the April 2005 bottom. The behavior is consistent with lower highs in the composite AD McSum posted recently by xDCox.
In summary, although we are seeing leading indications of new price highs going forward, the market needs to follow through to "show me". The failure of the NYSE common only cumulative AD line is a concern and may be confirming the waning liquidity exhibited by the NASDAQ and RUT weakening AD lines. The waning liquidity behavior is a concern for the long term health of the market.