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S&P 500 Reaches Strong Overbought

Percentage of components S&P 500 with a 14-day RSI above 70. Source: Bloomberg

There were twelve trading sessions in April, and eight of them closed the S&P 500 at an all-time high. In the aftermath of these events, the US stock market has reached strong overbought: as of Friday, over 20% of S&P 500 components closed with a 14-day RSI above 70. This is a record high since February and is more than double the average of the last five years.

Low volatility coupled with near-record levels in the S&P 500 is fraught with problems for bulls, Goldman Sachs analyst David Costin warned on Friday.

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