S&P 500 near record highs as overbought signals and short interest rise

The article says the S&P 500 is within 0.3% of a record high, with the index trading around 7,600 and the Dow also at all-time highs. Despite the strong momentum, technical indicators are flashing overbought signals: the S&P 500’s RSI is 74.5, and short interest in S&P 500 stocks has reached a record 3.79% of free float. The piece argues that while the rally remains intact, the risk of a near-term pullback or sharper volatility is rising, especially with earnings season peaking and valuations leaving little room for disappointment. The market tone is cautious rather than outright bearish: momentum and trend-following signals remain strong, but investors are being warned to avoid chasing highs and to consider trimming winners or tightening risk controls.