Last week FGIC had an uptick in support of the strong Spike Bounce signal, but it was a short-lived rally.
S&P500 tried to recover, bouncing between -1ATR and EMA 21. On Thursday, after a V2 trigger, it failed to rally out of the value zone, extinguishing the Spike Bounce signal. FGIC did not confirm that breakout attempt, but fell, closing at a –10 for the week. A Spike Bounce signal not supported by FGIC often leads to a return to the lows or deeper.
![](https://i0.wp.com/www.marketnoise.net/wp-content/uploads/2022/03/Figure-2-1.png?resize=960%2C454&ssl=1)
All timeframes that make up FGIC are in their negative or extreme fear readings. On the left, the weekly timeframe, which most closely tracks the medium-term cyclical pattern of fear and greed, entered extreme fear zone this week. In the past this level generated either a prompt bullish reaction (points 1, 4, 6) or a fall to a deeper panic levels (points 2. 3, 5): this is a moment of great indecision.
Next week it is imperative that the S&P500 does not close below -1ATR as it retests the January lows.