Chart of the Day - Wednesday, March 27, 2024

🏆 Today’s Chart of the Day was shared by Andrew Thrasher (@AndrewThrasher).

• The S&P 500 is gaining momentum, with weekly RSI at a four-year high of 78.8.

• Andrew points out that RSI has been “overbought” (above 70) for ten consecutive weeks — the longest streak in six years. The market rarely stays overbought this long, but previous extremes have lasted significantly longer.

• Overbought sounds bearish because it implies excessive or unsustainable buying. However, it just means that price is stronger than usual.

The takeaway: Legendary Technician Alan Shaw said it best — “The most bullish thing a market can do is get overbought and stay that way.”