The S&P 500 is clearly overstretched, according to David Sneddon and his team at Credit Suisse in London, who remain on alert for signs of the rally stalling.
Sneddon points out that both the daily and weekly RSI are above 80 and the market is more than 10% above its 200-day moving average, something which Sneddon says usually marks the beginning of an extreme (see Chart). Moreover, a daily DeMark Sequential sell signal is in place.
Sneddon says resistance can be found at the top of the S&P’s monthly Bollinger Band at 2750/55, where he will stay alert for signs of the rally stalling. He says the first significant support can be found at 2714/13.