All market corrections sooner or later start triggering one or more Spike Bounce signals, until the last one in the series augurs in the new bull market. FGIC has a close relationship with Strong and Medium Spike Bounce signals.
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. ]
Solid vertical lines mark the strong SB and the dashed lines medium SB signals during previous corrections. Sometimes a single signal was enough to interrupt the decline (June ’19, March ’20) more often multiple signals intervened, but in all cases the price started to rise only after FGIC started to rise as well. An SB signal followed by a still decreasing FGIC often signaled that the market bottom had yet to occur.
Last Friday a strong SB signal was triggered: we need the FGIC to rise in the next week for the bullish action to continue.
(This article has been posted on SpikeTrade. Follow FGIC updates on www.spiketrade.com)