Over the past week FGIC has gradually declined despite S&P reaching new all-time highs. This type of divergence has only occurred once during the pandemic recovery, in December 2020. Still, FGIC is still in the positive zone, quite far from signaling an alarm.

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 is derived from the CNN Fear Greed Index, whose individual components reflect a split in the behavior of investors and traders.  Traders: the junk bonds market, market momentum and the number of stocks at 52-week highs reflect extreme greed.  On the investor side, the increased purchases of put options and Treasuries in the last week reflect extreme fear.

Have a safe trading week,

Gianluca L.