Despite two Spike Bounce (SB) signals in just a few days, FGIC remains in its negative zone, and declining.

The bars on the chart are colored red when FGIC is -8 or lower (Extreme Fear) and green when FGIC is +8 or higher (Extreme Greed).   [ Please follow these links: original and update explanations how FGIC works. ]

The two latest SB signals are marked with dashed lines: S (strong) and W (weak).  The rally attempt of FGIC after the strong SB signal was rejected by its neutral zone (red circle) – the area between -2 and +2 – which often works as a congestion zone.  That area will likely be hard to break to the upside.

Of the 7 parameters that contribute to the CNN Fear&Greed Index, from which FGIC is derived, the only positive is junk bond demand, suggesting that investors are shifting risk from equities to low-grade, high-yield bonds. 

I would like to thank everyone for your kind and constructive comments and wish a very Merry Christmas to you and your loved ones.

Gianluca L.