RASI +500 Failures Thus Far Unfulfilled

The Ratio-Adjusted Summation Index (RASI) for NYSE A-D got up to +471 on May 8, 2026 and then turned down.  Failing to get up above about the +500 level is a sign that a rebound does not have enough energy to achieve "escape velocity", and it invites the market to go back and at least retest the last price low.

We have not gotten that outcome this time, at least not yet.  And the RASI is still below +500, now making a divergent lower high at +366 (for the moment), which disagrees with the higher highs by the DJIA and NYSE Composite Index. 

And it is not just the A-D RASI giving us this message.  We have a nearly identical message from the NYSE's Volume RASI, in which the +500 level carries the same message.  The NYSE Volume RASI also is showing a current divergence versus the NYSE Comp.

A Ratio-Adjusted Summation Index is calculated the same way as the classic Summation Index my parents created in 1969, with one adjustment.  We divide A-D by the sum of A+D to get a ratio, and then multiply the result by 1000 to get something more like a real number.  It is the equivalent of pretending that there are always exactly 1000 stocks trading every day.  Doing this makes for better long term comparisons, factoring out the changes in the number of issues traded. 

The +500 threshold is not a magical number, it is just something that we have found over the years is a useful level to watch.  And it is not like +501 is great but +499 is bad.  It does not work that way.  Seeing a failure around the +500 level is a bad sign.  Getting up well above +500 is a sign of strength.  And yes, there can be some squishy in between numbers that are hard to interpret.  Welcome to stock market analysis.

We also see a similar sign from looking at the A-D Summation Index for the stocks that make up the Nasdaq 100 Index (NDX).  I have taken to calling it the Nasdaq 101 Index, because they just added SpaceX (SPCX) without dropping a component, so for now there are 101 companies (and 103 stocks, because they count both share classes of both Alphabet and Honeywell).

Because the number of stocks usually remains fixed at 100, we do not have to do the adjustment for changing numbers of issues over time.  So the +50 level for this Summation Index works like the +500 for the RASI.  And the interpretation is the same, that failing at or below +50 is a sign of trouble for liquidity, and thus eventually for prices. 

In the case of the NDX, its Summation Index +50 failure has at least brought a sideways period for price movement.  The fascination with the Mag7 has worn off, and now everyone is worrying about semiconductor stocks.  There is always a story behind any episode of liquidity starting to dry up.

The bigger mystery now is why the NYSE-related averages are not faltering.  One could look to the Fed, which for unknown reasons is still doing about $30 billion per month of QE5, even though new Chairman Warsh does not like a big Fed balance sheet.  That is adding liquidity to the system, and perhaps papering over some of the problems which would otherwise be occurring.  Or perhaps the market is just waiting for bearish summer seasonality to get ripe to perform its fulfillment of the RASI +500 failures this time.