The S&P 500 has gained another 1% since making a new bull market high on Tuesday, leaving it well into the red zone in our trading range chart of the index below.
The move over the last two weeks has pushed the S&P 500's 10-day advance/decline line well into overbought territory. The 10-day A/D line measures the average daily number of advancers minus decliners over the last 10 days. When it hits extremes to the upside and downside, a short-term reversal in the recent trend is usually in store. As shown below, today the 10-day A/D line moved up to its highest level since the end of 2012. This doesn't mean that the long-term uptrend of the market is suddenly at risk, but it does mean investors should be careful on the long side over the next few days.