The S&P 500 has been on a remarkable run lately—but cracks are starting to show beneath the surface.
Let’s break it down using SPY (the ETF that tracks the S&P 500) and some of our favorite technical indicators: RSI and Bollinger Bands.
SPY is currently trading near the upper band of its Bollinger Bands, a level that often signals overbought conditions and reduced upside potential. Historically, price touching or exceeding the upper band often leads to a short-term pullback.
At the same time, the Relative Strength Index (RSI) for SPY is hovering around 70, a level that traditionally indicates an overbought market. When RSI crosses above this threshold, it means buying pressure has peaked—and sellers may be waiting to pounce.
Add in macroeconomic uncertainty,TARIFFS, interest rate speculation, and earnings season volatility, and we’ve got a perfect recipe for a market reset.
What to do next?
This could be a smart time to set some cash aside and prepare to take advantage of a potential pullback. If SPY and other high-quality stocks drop in the coming days or weeks, you'll be in a great position to sell cash-secured puts at lower prices—collecting premium while potentially entering long positions at a discount. It’s one of the most effective ways to turn volatility into opportunity.
Hope this helps!
Until next time...
Gautam
(Your Financial Freedom Coach)
