S&P 500: Climbing Higher or Due for a Reality Check?
The S&P 500 has been on a tear lately. After weeks of steady gains, it just logged a new all-time high around $6,388 on Monday, 28 July 2025. Investors are still riding the wave of excitement around artificial intelligence, solid earnings, and a Federal Reserve that seems to be hitting pause on rate hikes today. But with prices this high and momentum gauges starting to look stretched, some traders are wondering: is this rally still running strong, or is a cooldown on the horizon?
What the Charts Say
Take a look at the recent daily chart, and the signs are hard not to miss. The RSI is sitting just above 71. That’s in what traders call “overbought” territory. It doesn’t always mean the market will drop, but it often shows up when rallies have gone too far, too fast.
S&P 500 Daily Chart – RSI Overbought and MACD Showing Signs of Weakness
Source: TradingView. All indices are total return in US dollars. Past performance is not a reliable indicator of future performance. Data as of 30 July 2025.
Then there’s the MACD, another momentum indicator. It’s started to flatten out from June, and the lines are inching closer to a bearish crossover, which could mean the uptrend is losing steam. At the same time, trading volume isn’t exactly increasing. Even as prices have pushed to record highs, the number of traders jumping in hasn’t kept pace. When volume fades while price rises, it can hint at weakness below the surface.
All this suggests that the rally might still be on, but it’s walking a thinner line than before.
Momentum or Exhaustion?
Let’s look at both sides of the argument.
On the bullish side, momentum often feeds on itself. Big tech names are still delivering solid earnings, inflation is cooling, and rate hikes are off the table for now. With no clear ceiling overhead, we’re in an unknown territory. There’s nothing technically holding prices down. And when you zoom out (July 2023 to July 2025), the bigger trend looks solid. The S&P is comfortably above its 50-day, 100-day, and 200-day moving averages. That kind of alignment usually means the uptrend is strong and supported.
S&P 500 Long-Term Trend – Price Well Above Key Moving Averages
Source: TradingView. All indices are total return in US dollars. Past performance is not a reliable indicator of future performance. Data as of 30 July 2025.
But there’s a flip side. When prices stretch too far from those trend lines, like they are now, it can signal overextension. Right now, the S&P is sitting nearly 8-9% above its 200-day moving average, a level that’s historically triggered caution. And RSI is flashing the same overbought condition on longer-term charts too.
The last time RSI was this high, the market slowed down soon after. Plus, the MACD is losing momentum, and that same flattening could lead to a bearish cross. It’s like the market is still driving uphill, but the engine isn’t revving as hard as before. That’s not a crash warning, but it is a tap on the brakes.
What Traders Are Watching
Right now, all eyes are on key support and resistance levels.
First up, the recent high around $6,370. If the S&P clears that with strong volume, bulls may still have room to run. But if it slips below the 50-day moving average, sitting near $6,108, that’s the first warning signal. A deeper dip toward the 200-day average around $5,831 would raise louder alarms.
MACD & Volume View – Early Signs of Bullish Momentum Fatigue
Source: TradingView. All indices are total return in US dollars. Past performance is not a reliable indicator of future performance. Data as of 30 July 2025.
Momentum tools will help traders judge what’s next. If RSI holds above 60 and MACD stabilises, it might just be a healthy breather. But if RSI dips below 60 and MACD crosses downward with conviction, that’s when talk of a proper pullback could pick up.
Final Takeaway
The S&P 500’s trend is still up, but the ride is starting to look a little stretched. Momentum indicators are hinting at fatigue, and volume isn’t giving much backup. That doesn’t mean it’s time to panic. But it does mean it’s time to stay alert, tighten your stops, and be ready in case the market finally takes a break.