By Lawrence G. McMillan

There is a developing divergence between Cumulative Volume Breadth (CVB) and $SPX. That is, $SPX is making new all-time highs, but CVB is not. CVB is merely the running daily total of “advancing volume minus declining volume.”

There are two uses for CVB: one is a positive signal – when CVB makes a new all-time high before $SPX does. Then $SPX normally follows. However, there is a negative signal as well. When $SPX is making new all-time highs and CVB is lagging behind, that is a warning sign for the stock market. However, it is important to understand that this negative divergence can sometimes last for a long time – it is not an immediate sell signal.

There are two charts here, illustrating these points…

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