The market failed to trigger a strong Spike Bounce signal on Friday, as the monthly NL remained below its –500 level. FGIC spent the third consecutive week in extreme fear readings, 20 calendar days. 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 average length of stay in the extreme Fear zone has been 46 calendar days. It was 43 days in July and August. In the past, the occurrence of a strong Spike Bounce signal combined with a rising FGIC has frequently…
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The Composite Fear & Greed Index
When plotted below the daily chart of the S&P500 index, the daily CNN Fear & Greed Index (FGI) is not very useful in highlighting trading signals, as noise makes the FGI trend on a daily scale a bit erratic. In this article, I described how the daily CNN’s Fear & Greed Index can be calculated in four different timeframes – daily, weekly, monthly and quarterly, and plotted under the S&P500 index in Tradestation. As described, a longer time frame such as the weekly helps highlight market tops. (click to enlarge) The Composite FGI (FGIC), is obtained by assembling the four FGI timeframes into a single indicator. I plot FGIC below…
