The two pullbacks of the S&P in July and August pushed FGIC below the –8 level, the upper border of extreme fear readings. It was peculiar that those minor pullbacks from the historic highs of the S&P created levels of concern equal to the worst corrections of the past six years.
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. ]
FGIC hit resistance in its neutral zone – a frequent congestion zone – and remains negative.
In the past, when FGIC broke out of extreme fear readings (small green arrows) it never returned to such low levels.
Have a safe trading week,
Gianluca L.
2 Comments
Igor D.
Thanks for update Gianluca! As sir John Templeton said “Bull markets are born on PESSIMISM, grow on SKEPTICISM, mature on OPTIMISM and die on EUPHORIA.” I am scratching my head – did we had a correction and pessimism (in many stocks) without indexes having serious correction, and now are ready for a new bull market or is it just a some sort of preparation for a bigger correction ahead?
Gianluca L.
Hello Igor, if you ask me, the latter.