The S&P had a powerful rise during this week, following the latest strong Spike Bounce (SB) signal – but FGIC has not yet confirmed that signal, remaining flat and negative.
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. ]
The confirming signal that the market has found a bottom is given when FGIC rises after a SB signal. This happened following the October 7th strong SB: after the signal (vertical line 1), S&P continued to decline and the rally started one week later, when FGIC abandoned the extreme fear readings (green arrow).
Last Monday’s SB signal (vertical line 2), ignited a price rally, but FGIC remained flat in its negative zone. If this latest price uptrend is to continue, we want FGIC to rise as well, possibly breaking above its neutral zone (between +2 and -2) in the very coming days. If this does not happen, we can expect a pullback of the S&P to the value zone.