Friday’s close triggered yet another weak Spike Bounce signal. They remind me of the effect of a defibrillator on the cardiac rhythm: after a jolt the price re-establishes its bullish rhythm, at least temporarily.

Of the 4 timeframes that make up FGIC, only the slowest quarterly hangs on in the neutral zone, the rest are negative.  If and when the quarterly sinks into its negative zone, FGIC will reach its extreme fear zone.

The last three Spike Bounce signals, marked by vertical dashed lines, have all been weak.  They triggered rallies but had only a mild effect on market sentiment as FGIC remained in its negative zone, unable to overcome the neutral zone resistance (between -2 and +2).   Healthy uptrends are accompanied by both the NH-NL and the FGIC, rising and positive.

Have a safe trading week,

Gianluca L.