SPY has surged to $709.67, extending its recovery to 11.9% above the March 30 correction low of $634 and establishing a new high for this advance. The composite strengthened to +68 RISK ON with the RSI climbing to an extreme 98.8 reading — the most overbought condition seen in this cycle. The short-term remains at +95 RISK ON with 85% of stocks above their 20-day moving averages. The medium-term improved to +52 RISK ON with 61% above the 50-day MA. The long-term holds at +62 RISK ON with 56% above the 200-day MA. The sector count remains at 6 RISK ON with Technology now claiming the top spot at +73, overtaking the defensive leadership of prior sessions.

Sector Leadership

6 sectors RISK ON, 5 CHOP, 0 RISK OFF — Technology reclaims leadership:

💡 What We’re Watching

• SPY surges to $709.67, establishing new recovery high — The S&P 500 has extended its advance from the March 30 low of $634 by another $8 from Thursday’s close, marking the highest level of this recovery phase. This represents an 11.9% gain from the correction low and signals continued momentum in the rally.
• RSI reaches extreme overbought at 98.8 — The RSI has climbed to 98.8, the most extreme overbought reading of this cycle and well beyond the 70 threshold typically associated with stretched conditions. This surpasses Thursday’s 83.8 reading and suggests the pace of the advance may be approaching unsustainable levels. While momentum remains strong, historically such extreme RSI readings have preceded consolidations or pullbacks.
• Medium-term score flips to RISK ON at +52 — For the first time in this recovery, the medium-term score has crossed the +30 threshold into RISK ON territory, strengthening from +8 to +52. With 61% of stocks now above their 50-day moving averages, the intermediate-term breadth confirms this rally is building more durable foundations beyond the initial oversold bounce.
• Technology reclaims sector leadership with +73 composite — Technology has surged from +49 to +73, overtaking Utilities and Materials for the top sector spot. The sector’s short-term score remains at +95 with the medium-term strengthening to +75, reflecting a rotation back into growth leadership. Tech now sits at its 52-week high and is outperforming SPY by +4.6% over the past 20 days.
• Defensive rotation reverses as Utilities weaken — Utilities have dropped from +55 to +42 as the short-term score turned negative at -10, with only 50% of Utilities stocks above their 20-day moving averages. This marks a shift away from the defensive positioning that had characterized Thursday’s market, as growth sectors like Tech, Materials, and Industrials all strengthened their composites.

The Bottom Line

SPY’s advance to $709.67 marks a significant milestone — not only a new recovery high but also the first session where all three timeframes (short, medium, and long) are simultaneously in RISK ON territory. The composite strengthened to +68 with 6 of 11 sectors in RISK ON and zero in RISK OFF. The medium-term crossing above +30 into RISK ON is particularly notable, as it signals this rally is developing intermediate-term durability beyond the initial oversold bounce.

However, the RSI at 98.8 represents an extreme that warrants caution. While momentum remains clearly bullish, such elevated readings have historically preceded short-term consolidations as markets digest rapid gains. The sector rotation from defensives (Utilities dropping from top spot to sixth) back into growth (Technology reclaiming leadership) reflects risk-on positioning, though Energy’s continued weakness — with only 6% above the 20-day MA — remains an outlier.

In our view, the breadth expansion across all three timeframes and the strengthening participation in cyclical sectors like Materials (+64) and Industrials (+56) supports the case for a more durable advance. The combination of improving medium-term breadth (61% above 50-day MA) and strong long-term positioning (56% above 200-day MA) suggests the market structure is solidifying beneath the price advance.

That said, the extreme RSI reading suggests the pace of gains may be approaching unsustainable levels in the near term. We would not be surprised to see a pause or consolidation as the market digests the rapid 11.9% advance from the March 30 low. The key will be whether any near-term pullback remains orderly and maintains the medium-term RISK ON structure that has now been established — a sustained move below +30 in the medium-term score would signal a shift away from the current favorable regime.