NASDAQ's incredible run
The stock market's rally is impressive. But trees don't grow to the sky, and no rally lasts forever. A near-record 35% of NASDAQ 100 stocks are overbought (RSI > 70).
In the past, this always led to a NASDAQ 100 pullback over the next 2 weeks, even though such strong momentum pushed the NASDAQ towards new highs over the next 6 months:
Similarly, this usually led to a broad S&P 500 pullback over the next 2 weeks. Given that tech accounts for an ever-increasing portion of the U.S. stock market's market cap, it's safe to assume that a tech pullback would drag down the entire U.S. stock market.
Looking at the past few years more closely, this occurred near the market's top in January 2018 & January 2020. Meanwhile, the % of S&P 500 stocks in a correction has fallen below 50% for the first time in 6 months:
When this happened in the past, this wasn't a clear bearish sign for the S&P 500 on any time frame: