Analisi di Mercato

FGIC in panic mode. Analysis of the Composite Momentum

The oversold condition continues: S&P traced a new low, the Spike signal was confirmed by closing Friday above -4000, the next SB signal is likely to be rated strong.

FGIC fell further to -11, the level last reached at the end of the pandemic selloff.  Next week, the triggering of an SB signal accompanied by the rise of FGIC will hopefully join the ongoing Spike signal.

The Composite Momentum (CM) is an indicator created by Francesco Caruso, you can find the details along with the formula for some trading platforms here (in Italian, but your browser will translate it easily). 

The chart shows the quarterly S&P500 index since 1960.  The changes that have occurred in over 60 years, in both the real and the financial world, are more than can be counted, but the cyclical pattern of this indicator has never changed.  On the right side of the chart, notice how the CM has just begun to fall.  It is still above the 50 level: in the past, this indicator has never found support before approaching the zero level.