The extreme greed and extreme fear levels begin above +8 and below -8. At the end of the pandemic selloff the -8 level acted as support for FGIC for several weeks while S&P was gradually gaining strength. It is now acting as resistance.
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. ]
Wednesday's Spike Bounce signal, rated medium (marked with M) was the first after a long string of weak signals since October 2020: markets have weakened in recent weeks and are looking for stronger stimuli to regain momentum. In the past, FGIC rally after a Spike Bounce signal has frequently signaled the end of a correction or a bear market. This time FGIC did not follow SB with a rally.
An ominous bearish divergence from the S&P looks poised to sink prices.
The situation seems to promise a further plunge into fear territory.
Have a safe trading week,
Gianluca L.
1 Comment
Claudio D.
I still think that the market will continue the uptrend, climbing a wall of worry. But over the years, have learned the hard way that there is a big difference between what we think, what we feel, and what happens.