The S&P 500 just accomplished a first-time feat - and it suggests more wild swings ahead

By Joseph Adinolfi

For the first time ever, the S&P 500 index went from overbought to oversold and back to overbought in under a week

The S&P 500 has been flitting back and forth above its 50-day moving average lately.

The start to 2026 has brought no shortage of historic developments in global markets. Investors just witnessed another one over the past week.

For the first time ever, the S&P 500 index SPX has swung from overbought territory to oversold territory, then back into overbought territory, all in under a week, according to analysts at Bespoke Investment Group.

"Never in the history of the S&P 500 has the index swung from overbought to oversold and back again in a week or less. You just witnessed history!" the team said in commentary shared with MarketWatch on Tuesday.

The historic swing began on Feb. 2, just as a rout in software stocks - dubbed "the Saaspocalypse" by some, a reference to the term "software as a service" - was starting to pick up steam. On that day, the S&P 500 was trading in overbought territory, which Bespoke and many others define as one standard deviation above the index's 50-day moving average.

By Feb. 5, the index had fallen to one standard deviation below its 50-day moving average, putting it in oversold territory. But by the closing bell on Monday, Feb. 9, the index was back in overbought territory after the S&P 500 tallied its strongest two-day advance since November, Dow Jones Market Data showed.

These wild swings were only the latest chapter of what has been a volatile stretch for the S&P 500, as the index has struggled to break above 7,000 in a lasting, meaningful way.

In early December, the S&P 500 closed 1.5 standard deviations above its 50-day moving average, only to drop back below it less than one week later. Three trading days after that, the index was back in overbought territory. Investors saw similarly wild swings in January. The index closed in overbought territory heading into the long weekend of Martin Luther King Jr. Day, only to drop back below its 50-day moving average when the market reopened on Tuesday, Jan. 20.

"All kidding aside, the historic back-and-forth action in the S&P 500 over the last three months reflects not only the market's inability to break out above 7,000, but also the buy-the-dip mentality that remained ingrained in the psyche of investors," the Bespoke analysts said in written commentary.

Investors have witnessed a number of notable developments across markets this year, including an epic boom and then bust in the prices of silver (SI00) and gold (GC00), and a powerful streak of outperformance for the small-cap Russell 2000 Index RUT.

U.S. stocks have seen a bit of volatility on Tuesday, with the S&P 500 finishing lower despite trading higher for much of the session. The Nasdaq Composite Index COMP also finished in the red, while the Dow Jones Industrial Average DJIA - which has outperformed these other two indexes in 2026 - finished in record territory, even though it only rose by about 50 points.

Read: Software ate the world. Now, Wall Street is worried AI will eat software.

-Joseph Adinolfi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

02-10-26 1651ET