For technical-based traders, this will be significant to note as this has only occurred two other times with SPY over the last year when analyzing the daily charts. Each time it occurred, SPY followed suit and retraced to the downside in a brief pullback before building back buyer momentum.
June 8th, 2020, was the first time the RSI crossed into the overbought territory. Subsequently, SPY sold off -7.33% to its then low June 15th, 2020, before regaining steam back to the topside.
Again, on September 2nd, 2020, the relative strength index broke the overbought 70 level, and SPY proceeded to sell off -10.86% from September 2nd until its bottoming out on September 24th.
SPY has just broken through the overbought level once again.we will see if this is a signal of a short-term retracement where investors take money off the table or overlook this technical factor altogether.
SPY has closed positive fifteen out of the last seventeen daily trading sessions, including a thirteen-day win streak as well.
Attached is a one-year chart of SPY highlighting the RSI overbought levels.