Posted by Joseph Y. Calhoun, III

The improving economic data pushed the S&P 500 through its 200 day moving average today:

From a chart perspective, that’s a pretty big deal. There is resistance around 950 (January high) and further resistance at 1000. I have been expecting the market to trade in a sideways pattern and consolidate the recent gains, but I may have to re-evaluate. On the other hand, note that the price moved above the top Bollinger band (those are the green lines in the chart above) and that indicates a market that is very overbought. That doesn’t mean the market can’t move higher but a short term pullback would not be surprising.

Bespoke Investment Group has a similar post on international markets. All the markets they review are in overbought territory. Just a short term warning signal.