Today is the annual Russell reconstitution where companies are moved in and out of the various indices. This activity usually begins forth odd price action and high volume. While the price activity was not out of the ordinary, the volume today was very strange.
The Nasdaq Composite (COMPQ) had huge volume. Price rose about one-half of one percent. On a normal day this would be very bullish. But with the rebalancing it should be discounted without follow through next week.
The SP600 Small Cap Index (SML) had proportional volume to the Nasdaq. This makes sense as many stocks are moving in and out of the Russell 2000 index.
But the SP500 and Dow Jones Industrial Average indices had below average volume. I expect the high volume on the Nasdaq and SP600 were completely due to funds moving into the new stocks and out of the stocks being removed from an index.
Charts courtesy of Stockcharts.com
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