Last week’s bullish upswing of FGIC brought this index back to its neutral zone, as improving sentiment drove the S&P to new all-time highs. FGIC neutral zone (between -2 and +2) often marks static congestion areas.

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. ]

After recovering from the pandemic-driven selloff, FGIC has spent the last year bouncing between its neutral zone and the extreme greed readings.  Congestion areas frequently reverse their roles, and the bull could now face a fairly strong resistance. 

The current uptrend in FGIC has two weaknesses: it did not come from a drop into the extreme fear readings and was not preceded/accompanied by a Spike Bounce signal.  Breaking through the neutral zone and a close above +2 would be a very good signal for a continuation of the bull market.

Have a safe trading week,

Gianluca L.