The S&P500 traced a new low, the weekly NH-NL closed below -4000 for the second time in five weeks, Friday’s daily bar closed just above -3 ATR.Looking at history, in the 2008 bear market, the second plunge below -4000 of the weekly NHNL occurred five weeks after the first one, triggered by Lehman Brother’s bankruptcy.

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 back again at -11, only one tick above its lowest possible level in the extreme fear zone.  The area around 3500 S&P (green horizontal line) is a potentially important support, as it represents the 50% retracement between the all-time highs and the low of the pandemic driven selloff in 2020.

As we have seen in the past, we want to see FGIC follow upward on the next Spike signal, which will be triggered when the weekly NH-NL closes above -4000. 

Have a safe trading week

Gianluca L.