The Relative Strength Index (RSI), a simple momentum oscillator, is a useful indicator in bull market corrections for gauging just how intense the damage truly is. Generally speaking, above 70 on the RSI tends to indicate overbought conditions (which, depending on market context, often stay overbought/become even more overbought) and below 30 tends to indicate oversold conditions (which, depending on market context, can stay oversold/become more so).
On the weekly RSI of the S&P 500 Index, moderate bull market corrections tend to find support at RSI 50 on the weekly timeframe. Finding support at RSI 50 indicates a correction is indeed in play (obvious at this point), but it is not quite as deep as the corrections we have seen each of the past few summers (10-20% off the highs).
As an example, the 8% correction in January-February 2010 found support precisely at RSI 50 on the weekly S&P 500 chart.
Currently, as you can see below on the top pane of the chart, the S&P 500 Index is sitting slightly above RSI 50.
While far from the be-all, end-all, this use of the RSI can be another indicator pointing to a pivotal week for the market. I am looking to see if RSI 50 holds here. You can see over the past few years that losing RSI 50 has led to much deeper corrections.