S&P 500 Hits Extreme Overbought Levels; McMillan Warns of June Downturn Risk

According to Lawrence G. McMillan, president of McMillan Analysis, the S&P 500 has reached extreme overbought conditions as of early June, with multiple technical indicators approaching critical thresholds. Following nearly two months of steep gains—marking one of the strongest two-month rallies since 1950—the index now shows signs of fatigue, McMillan warned.

Key technical support levels stand at 7,500–7,520, with deeper support at 7,330 and 7,000 serving as the strongest foundation for the current bull market. On June 3, NYSE breadth deteriorated notably, with the number of stocks hitting 52-week lows exceeding new highs by a single stock—a bearish divergence signal. McMillan emphasized that persistent deterioration in market breadth could invalidate bullish technical signals, while options data also signal overheating conditions. He advised investors to closely monitor key support levels and adjust positions if indicators confirm a reversal, as the risk of a significant June pullback has risen materially.