Weekly S&P Chart - Flash Crash Part II ?

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The weekly RSI on the S&P 500 reached 76.17 less than a month ago. That was the most overbought the weekly RSI had been in almost 7 years.

Looking back to the beginning of 2008 there's only been one other instance where the weekly RSI breached the 70 level. That was in Apr/May 2010.

During the week ending Apr 30, 2010, after reaching a high of 72.62, the weekly RSI dipped back below 70 (the red line in the chart). The very next week the S&P suffered the flash crash (on Thursday, May 6, 2010), quickly losing 10% of it's value.

Fast forward less than a year later and, after hitting a high of 76.17, the weekly has RSI dipped back below the 70 level in an eerily similar fashion just this past week.

While I'm not suggesting we see a similar "flash crash" this week, I do think the chart is warning of a potential selloff in the very near future.

I have been short over the past 2 weeks and added to shorts this afternoon after the market bounced off its lows. If we get a dead cat bounce back to the 1300/1305 area this week I will look to add to short positions again. Above 1305 would force me to reconsider my view.