• 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…