FGIC in its extreme fear zone, with the markets at all-time highs is something that never happened in the past: a signal of how the current markets are to be handled with great care.

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 last medium Spike Bounce reached its target but the cluster of the last three signals (marked by vertical lines) was not enough to move FGIC out of the extreme readings: a bearish signal.

The weekly component of FGIC, has risen from its extreme readings, but still in the negative zone with the rest of timeframes (daily, monthly, quarterly).  In the past, quick V-shaped rebounds from below the –8 level predicted a bull market recovery after a slight pullback, while a deepening below this level has accompanied all the major corrections.

Have a safe trading week

Gianluca L.