Wall Street ended modestly higher Thursday, with the major indices brushing against all-time highs — but technical signals are flashing caution. The 14-day RSI on several key ETFs now sits at or above 70, raising the classic question: is this the start of another extension leg, or a setup for a near-term pullback?

The SPY S&P 500 ETF closed at $753.91, up 0.46%, a hair's breadth from its 52-week high of $754.29. The QQQ Nasdaq tracker rose 0.7% to $734.53, also near its annual peak of $735.41. The IWM Russell 2000 ETF gained 0.52% to $291.88, just shy of its 52-week high of $292.13.

Despite the positive price action, technical indicators urge caution. The SPY 14-day RSI stands at 70.8 — the threshold for overbought territory. QQQ has crossed firmly into overbought terrain with an RSI of 72.0. IWM, while still below 70 at 62.6, is trending upward alongside the broader market.

Why It Matters

A market trading at or near highs with elevated RSI creates a familiar dilemma for wave traders and technical analysts. Momentum could extend further into an impulse wave extension. But daily RSI readings above 70 are a textbook signal that a short-term correction is increasingly likely.

These levels come against a backdrop of mixed macro inputs: April's PCE reading came in hotter than expected, geopolitical tensions with Iran are creating crude oil volatility, and Goldman Sachs raised its S&P 500 year-end target to 8,000.

Key Technical Moves

SMCI posted a standout session, surging 11.42% on heavy volume. The stock broke decisively above its 200-day simple moving average of $35.99 and closed at $42.55. The RSI of 71.7 confirms strong momentum but also signals that the move may be stretched in the near term.

AAPL hit an RSI of 87.4, deep in overbought territory. The stock is trading at $310.78, approaching its 52-week high of $313.26 and well above both its 50-day SMA ($273.83) and 200-day SMA ($262.37).

RKLB continues its blistering run at $147.59, with an RSI of 79.9. The stock crossed above 70 several days ago and has yet to correct — a pattern that often precedes a pullback. Its 52-week high of $151.00 is now in sight.

NVDA was the quiet giant, slipping 0.18% to $212.23 with an RSI of just 50.7 — in neutral territory. The stock remains well below its 52-week high of $236.54, though its 50-day SMA of $198.69 provides solid support.

MSTR bucked the trend with a 4.51% decline to $147.25, pushing its RSI to 30.9, approaching oversold conditions. The stock is now below its 50-day SMA ($155.32) and well below its 200-day SMA ($208.85), suggesting a potential reaccumulation zone for wave counters.

Sector Breakouts

The solar sector flashed a major technical signal today, breaking above a well-defined downtrend that has persisted for over five years. The UBS Solar basket (UBXXSOL) is now up 40% year-to-date. The catalyst: expectations of a Section 232 tariff announcement in mid-to-late June on imported solar panels, alongside falling yields. First Solar (FSLR) led the charge, trading around $268.

Drone stocks erupted after a Wall Street Journal report that the Department of War is in talks to fund drone startups, including Performance Drone Works, Unusual Machines, and Neros Technologies. Unusual Machines surged 33%, Red Cat rose 13%, and AeroVironment gained 8%. The $1.1 billion Drone Dominance initiative aims to stockpile 300,000 low-cost attack drones by 2027.

Macro Context

April PCE data published today showed inflation heating up, cementing expectations that the Fed will hold rates steady. The dollar weakened on reports of a potential US-Iran ceasefire deal, which also pared oil gains. Citadel Securities noted that markets may be underpricing the likelihood of a deal.

Meanwhile, Goldman Sachs' Ben Snider raised the firm's S&P 500 target to 8,000, citing continued earnings growth — but some technical analysts are questioning whether valuations at these levels already price in perfection.

The Bottom Line

The bull case is clear: indices at highs, strong momentum, and multiple sectors breaking out. The technical cautions are equally real: overbought RSI readings, geopolitical risk, and sticky inflation. Wave traders are watching closely to see whether the current move extends as another impulse leg — or whether the correction they've been waiting for finally arrives.