Both NH-NL and FGIC have gradually but steadily increased since mid-June. A long series of bullish signals occurred during this period. On Friday we received yet another Spike Bounce signal (medium) and a V2 trigger. In a bull market, each of these signals would have suggested a buy on a dip, but a bear market such as the current one requires much more stimuli.

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. ]

Market sentiment, as measured by FGIC, has not yet responded adequately to the various bullish signals. The index needs to move away from extreme fear readings while the weekly S&P500 needs to reach and maintain -1ATR to have a sustainable price rise.

Have a safe trading week,

Gianluca L.