The was able to rally but stalled out at a resistance level of around 4,745, which dates back to November 2021 and January 2022. Meanwhile, the index traded above the upper Bollinger band for the fourth day in a row, and the RSI moved above 80.

The last time RSI moved over 80 and the upper Bollinger band was in September 2020. In 2018, the RSI topped out at 87, while the index traded above the Bollinger band with an RSI when it was at 78. 

In both cases, the index traded down to the lower Bollinger band, which now would be around 4,475. Of course, as the index falls, the lower Bollinger band will also move lower, so it could be lower than 4,475, and the S&P 500 index would ultimately find a short-term low.

Of course, in 2018, that began as Volmageddon and led to a pretty volatile year.

In 2020, it led to a volatile period, too, but eventually, the flows of QE and cheap money could carry the S&P 500 higher.

Of course, today is not 2020, money is not cheap, and the Fed is not conducting QE. Today, it is much more similar to 2018, with the contraction of the Fed’s balance sheet and higher rates.

Plenty of people will say I’m wrong, and the market is going higher. I do not care; markets do not trade in straight lines, and given these conditions, lack of fundamental support, and reserve balances, which should be heading lower, I would say good luck with that.