Stock Market is Overbought in the Short-Term
Weekly Chart
As we head into the final calendar month of the year, the US large cap indexes are showing healthy weekly charts. The SPX500 (left) and NAS100's (right) weekly technical indicators are constructive. The respective green 5-week EMAs are bullishly above the orange 10-week EMAs for both instruments and their corresponding momentum-based RSIs are above 50 – which is bullish. The longer the individual RSIs stay above 50, the greater the momentum support for the indexes.
However, the daily charts do suggest that a near term correction may be a risk.
Daily Chart
The SPX500's daily RSI is above 80 (green rectangle), as is the NAS100's RSI (blue rectangle). Above 80 is typically considered as overbought and it is unlikely that the RSI will maintain above this level for a sustained period. As such, a pullback in both indexes is a possibility as their respective RSIs normalise. However, given the strong weekly charts, a pullback may potentially be used by the market as an opportunity to buy into the dip.
Russell Shor
Senior Market Strategist
Russell Shor is a Senior Market Strategist at FXCM, having been promoted to the role in 2025 in recognition of his depth of insight and consistent delivery of high-impact market analysis. He originally joined FXCM in October 2017 as a Senior Market Specialist.
Russell holds an Honours Degree in Economics from the University of South Africa, is a certified FMVA®, and a full member of the Society of Technical Analysts (UK). With over 20 years of experience in financial markets, his work is renowned for its clarity, precision, and strategic value across asset classes.
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