U.S. Stock Rally Sparks Longest ‘Overbought’ Streak in 21 YearsBy and
S&P 500’s relative strength reading tops 70 for 16th day
Market hasn’t stayed above threshold this long since 1996
The S&P 500 Index’s superlative start to 2018 is making a contrarian technical indicator look silly.
The benchmark gauge is poised to end trading Thursday with a 16th straight day in overbought territory, as judged by the Relative Strength Index. That would be the longest such run in more than two decades. A close above 70 on Thursday passes the 15-session string seen in October. From Nov. 6 through Dec. 2, 1996, the gauge’s overbought streak reached 18 sessions.
If you sold when the latest streak started, you’ve since missed out on a 5 percent rally.