Think the stock market just went from downright depressed to extremely euphoric? It’s not in your head! The S&P 500 Index (^SPX) just swung from oversold to overbought in the second-shortest timeframe EVER.
Check out the MoneyShow Table of the Day — courtesy of Bloomberg. As you can see, the 14-day Relative Strength Index (RSI) on the S&P just surged from below 30 to above 70 in only 11 days. The index has only done that faster ONCE in three quarters of a century worth of record-keeping. That was in August 1982, when it took six days.
In fact, since the turn of the century, there have only been four times we even came close. They were in 2016 (13 days), 2023 (15 days), 2019 (21 days), and 2014 (22 days).
So, if you’re suffering from a case of market whiplash, take heart. You’re not alone. We really have swung to giddiness in a short period of time.
Then there’s the huge shift in sector leadership. Through midday Friday, the State Street Technology Select Sector SPDR Fund (XLK) was the big April winner at +14.8%. The State Street Energy Select Sector SPDR Fund (XLE)? It was DOWN 6.7% month-to-date.
What’s more, we have tons of high-momentum stocks leading the charge during the rebound. Space stocks? Check. Chip stocks? Check. A failing sneaker company that decided to pivot to AI? Check (for a while, anyway).
I’ve said for some time I expected H1 2026 to be volatile. And volatile it has been. But while I remain “cautiously optimistic” about markets longer-term, we’re wildly overextended in the short term. So, if you’re an active trader, it might be time to cash in some chips.
