The rally today (surprising to me) has now pushed SPY into EXTREMELY overbought territory with the RSI2 at 95. Yes, we could actually push to 208...stranger things have happened....but the low volume recent gains have been climbing over a wall of worry with little regard and tomorrow's option expiration should give us a better indication of how much of the action has been short covering and how much has been real accumulation.
The FED's dovish tone yesterday was ostensibly the catalyst for today's positive reversal but we also saw a number of afternoon reversals that suggest points of weakness that may soon expand to other sectors. Gold and oil have also been screamers recently but the jury is still out on whether a true bottom has been hit or whether the Saudis and other Mid East suppliers are just playing gamesmanship with the market in the short run..
XLU of course is EXTREMELY overbought times 2...but it keeps going up....far beyond technical expectations. For now its the momentum pivot to keep your eye on..