Chart of the Day - Thursday, December 14, 2023

Today’s Chart of the Day was shared by Steve Strazza (@sstrazza). The S&P 500 has risen for seven straight weeks, in which it's gained nearly +15%. This face-ripping rally has pushed the index deeply into overbought territory, with RSI hitting its highest level since September 2020. Steve points out that 44% of S&P 500 stocks are also overbought, a record level. The only other readings that came close were in June 2003 and 2020, both of which occurred as the market entered a new bull market. Many hear "overbought" and immediately assume it can't go any higher. However, RSI can stay overbought while prices trend higher.