Magnificent 7 vs. S&P 500
Today’s post will focus on relative strength index (RSI) bullish divergences. First up is the Magnificent 7 (MAGS) vs. S&P 500 (SPY) price ratio. Despite the ratio forming a new low in March, the 14-day RSI formed a higher low. This divergence tells us that bearish momentum is weakening. Is the Mag7 poised for a move higher?
MSCI China Index
Next up is the MSCI China Index (MCHI). The daily price chart formed new lows in March, but bearish momentum is fading, as the RSI formed higher lows. To couple this divergence, MCHI sits atop a well-tested support-resistance zone. This additional datapoint makes the RSI divergence all the more interesting.
S&P Retail
Last but certainly not least is S&P Retail (XRT). Same scenario – price formed a new low, RSI did not. In fact, RSI is already back above 50 and well into neutral territory. This is all happening at recent support, formed by the November 2025 low. If retail stocks are starting to work, it bodes well for the health of the broad market.
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