The US stock market has maintained its upward trajectory, with the S&P 500 index achieving a remarkable 10.8% increase in the first quarter, surpassing the usual yearly gain. The stability of the index has been notable since late January, with fluctuations contained within a narrow 2.5% range. This pattern of modest retracements fueling further investment is characteristic of well-established bull markets that are still finding upward momentum.

Notably, the rally is diversifying beyond the previous dominance of leading tech giants, with even the broader Russell 2000 index reaching its highest point since January 2022. This shift indicates a healthier, more inclusive market growth. Despite the CNN Fear and Greed Index teetering near “extreme greed” levels for the past four months, the market has managed to avoid overheating, suggesting sustained bullish momentum without immediate risk of a downturn.

The VIX volatility index remains at levels seen during 2018 and 2019, suggesting that the current market stability isn’t unusual. Historical patterns in the S&P 500’s performance, such as those observed from 2017 to early 2020, show that periods of steady growth can last for several months before being disrupted by external factors.

The weekly RSI is nearing an overbought threshold of 80, which in the past has preceded market corrections. However, similar past instances also saw the market continue to rise before any pullback occurred. Therefore, while the current market conditions do not suggest imminent overheating, investors should remain vigilant for external shocks that could prompt a significant market adjustment.