This market turns on a dime and often very unpredictably. I call this price volatility, not to be confused with implied volatility, a different animal. I believe price volatility is largely caused by uncertainty with several different issues worrying traders simultaneously. We see the effects on the market nearly every week. Last week, the Standard and Poor’s 500 Index (SPX) was on a strong bullish run, gapping open higher three days in succession. SPX began this week with a nice gain, but then it fell out of bed. Thursday opened lower and seemed to be poised to continue the trend, but it reversed and booked a significant recovery for the week thus far. But that couldn’t hold; today’s trading was disappointing.

SPX closed today at 3484, up less than a point, and down about one half of one percent for the week. The most negative aspect of today’s trading was the fact that SPX could not hold the early high today at 3516. Trading volume for the S&P 500 companies continues to largely track below average, and those lower trading volume levels warn us that any bullishness we observe may be short-lived.

The volatility index for the S&P 500 options, VIX, opened the week at 26%, and closed today at 27.4%. VIX hit its high for the week intraday on Thursday at 29%. These are relatively high levels of volatility historically, even though we are probably becoming accustomed to them this year.

IWM, the ETF based on the Russell 2000 group of companies, has surprisingly outperformed its big brothers this week. Today’s close at 162.35 is very close to its recent high of 164.24 on Monday. The Russell 2000 companies are small to mid-capitalization stocks that tend to lead bull markets higher and bear markets lower. Seeing the Russell 2000 index outperforming the S&P 500 is a bullish signal.

The NASDAQ Composite index closed today at 11,672 for a gain of 42 points or 0.4%. But NASDAQ ended the week down by 0.5%. NASDAQ’s trading volume declined steadily all week - uninspiring. Is the bloom off the NASDAQ stocks?

The Russell 2000 companies have been trading more strongly than the large-cap indices for the past couple of weeks. This week, small to mid-cap stocks are signaling bullish support simply by resisting the downward pressure that is more obvious in SPX and NASDAQ. IWM, the ETF composed of the Russell 2000 stocks, remains very close to the high it set on Monday. IWM never did recover its pre-correction high, but it has been trading relatively more strongly for the past three weeks. That is a good sign for the overall market, but beware. This is a market full of nervous traders. The least rumor will cause them to hit the sell button. Be careful that you don’t get in the way of these elephants as they panic in the rush to protect their gains.

Remain vigilant. This price volatility isn’t going away anytime soon.