The weekly chart of SPDR Dow Jones Industrial Average ETF Trust (DIA) shows price continuing its steady long-term advance, but momentum is now pressing into an area that has historically marked short- to intermediate-term exhaustion.

The RSI (Relative Strength Index) is currently pushing into the upper edge of its “buffer zone” — the region just below traditional overbought territory. This area has repeatedly acted as a ceiling for momentum over the past several years. As highlighted on the chart, DIA has only managed to push decisively above this zone a handful of times, and those instances were typically followed by periods of consolidation, pullback, or sideways digestion rather than continued immediate upside acceleration.

I send setups like this real-time to a select group of traders. They are able to copy and paste and grab the trade.  Here is all of the info.

This doesn’t automatically signal a major top, but it does tell us the move is becoming stretched on a weekly momentum basis. When RSI reaches these levels, upside reward tends to shrink while the probability of pauses, rotations, or volatility increases. In other words, the trend may still be up — but it’s operating on thinner ice.

Traders and investors should be aware that risk rises as momentum approaches these historical extremes, and position sizing, profit protection, or more selective new entries become increasingly important in this environment. This may be a time we look at Puts vs Calls.

I wish you the very best,

Wendy