• FGIC and the Spike Signal

    There is no change this week, as FGIC remains at the lower edge of the extreme greed readings (+8) for the eleventh consecutive day. There is no new message from FGIC. Today I’d like to share with you my latest research project: a study of the relationship between FGIC and Spike 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. ]   The Spike signal is a rare and powerful signal that occurs when the weekly NH-NL crosses above –4,000.  We had it three times…

  • How FGIC performs around the Spike signal

    The bars on the chart are colored red when FGIC is -8 or lower (Extreme Fear) and green when the Fear & Greed Composite Index (FGIC) is +8 or higher (Extreme Greed). [ Please follow these links: original and update explanations how FGIC works. ]  There is no change this week, as FGIC remains at the lower edge of the extreme greed readings for the seventh consecutive day. The Spike signal is a rare yet powerful signal that is triggered in the deepest and most violent corrections when the weekly NH-NL crosses upward of –4,000.  This signal has been triggered three times in the past five years: the figure shows the latest Spike signal…

  • How long can FGIC stay at an extreme greed level

    The bars on the chart are colored red when FGIC is -8 or lower (Extreme Fear) and green when the Composite Fear & Greed Index is +8 or higher (Extreme Greed). As the S&P500 hit new all-time highs again this week, FGIC returned to its extreme greed zone on Thursday.  This bullish period would seem to be very long, but not unusual.  You can see in the inset (dates in the European format) that the average time from the first day at extreme greed levels (+8 or higher) to the first day at extreme fear levels (– 8 or lower) has been 144 days. The longest period on record was…

  • The Fear&Greed Composite deepens its divergence from S&P500

    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). Continuous and dashed lines represent past “strong” and “medium” Spike Bounce signals, respectively. [ Please follow these links: original and update explanations how FGIC works. ]  FGIC lost another two points during the abbreviated last week of the year.  It remains in its positive zone but continued to weaken while the S&P closed at all-time highs. 2020 has been a particular year for this indicator.  It never happened before that a Spike Bounce signal was triggered with FGIC in positive zone.  In 2020 it happened 3 times (marked…

  • FGIC exits its extreme greed zone

    Please follow these links: original and update explanations how the Fear & Greed Composite Index (FGIC) works. All four Fear/Greed timeframes which I combine into the FGIC index have been diverging from price for some time. When it comes to divergences, the weekly appears to be the most useful timeframe. All timeframes have left their extreme greed zones, turning to “positive,” while the fastest daily is already neutral. 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). After tracing a double top in extreme readings FGIC has also exited its extreme greed zone and is back in…

  • Is Greed Growing Old?

    The bars on the chart are colored red when the Fear&Greed Composite Index (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. ] FGIC has remained in the extreme greed zone for almost a month.  It had first entered that zone four months ago, had a pullback, and is up there again.  We see two similar occasions in the past (boxed in red).  Such double tops always preceded pullbacks in the S&P – either minor or severe. The current double top of FGIC appears to be quite old… (This article…

  • Extreme Greed and the Ride to the Bottom

    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).  (click to enlarge) Please follow these links: original and update explanations how FGIC works. On Thursday, FGIC reached level 11 – a sign of great euphoria in the markets. Examining my five years of history, all three prior occasions of the index reaching this level, were not harbingers of an imminent correction. On the contrary, in the previous two, a parabolic uptrend had began (marked by dashed arrows). The rise of FGIC to extreme greed readings (+8 and higher) inevitably ends with a fall to its opposite, the…

  • The Fear-Greed Index Composite Rises to the Level of Extreme Greed

    Please follow these links: original and update explanations how FGIC works. (click to enlarge) The CNN Fear&Greed Index has reached positive to extreme greed readings in all 4 different timeframes. 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).  Continuous and dashed lines represent past “strong” and “medium” Spike Bounce signals, respectively. This week the Composite FGI, a derivative of the CNN FGI, has reached +8, the lower boundary of its “extreme greed” range.  It got there even though the slower quarterly timeframe is still below its extreme greed zone (see inset). This is unusual, since typically FGIC…

  • FGIC in positive zone for five months

    FGIC stands for Fear/Greed Index Composite, a derivative of the CNN Fear&Greed Index. Please follow these links: original and update explanations how FGIC works. (click to enlarge) We saw last week that FGIC is useful for tracking divergences.  They are best seen in four separate timeframes which make up the Composite index.  Negative divergences are currently present in all timeframes. 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). FGIC had reached its positive zone (above the zero line) in June and it has remained positive to neutral since then.  In healthy markets FGIC…

  • Composite Fear & Greed Index tracing a bearish divergence

    The Fear & Greed Index Composite (FGIC) is a derivative of the CNN Fear & Greed index.  Please follow these links: original and update explanations how FGIC works. (click to enlarge) 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). Even after the two latest Spike Bounce (SB) signals (points 2 and 3), FGIC remains in its neutral zone.  It has began tracing a bearish divergence with the post electoral S&P500 all-time highs.  The last time such a divergence occurred was just before the pandemic driven selloff (point 1). As discussed here, bearish divergences are best highlighted…