A week ago we saw that while the S&P rose to a new high there was no confirmation from FGIC which actually fell. This week it continued lower, and even the last two bullish days could not reverse that trend, and FGIC closed at –4, in negative territory.

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 time FGIC was this low in May 2020 (red diagonal arrow), during its rise from the extreme fear readings of the new pandemic.

A new (weak) Spike Bounce signal was triggered on Friday (dashed vertical line marked by an “S”) and it will be important to see if the eventual rise in price will be followed by a rise in FGIC.  In the past, a divergence between price and FGIC after a Spike Bounce signal has often signaled that the pullback/correction was not over. 

Have a safe trading week.

Gianluca L.