FGSI – Confirmed lows/highs
Confirmed lows/highs occurs when both Sentiment and price action make lower lows or higher highs. This indicates the continuation of the trend. So while the extreme value in Sentiment does signal a potential short-term reversal, it is expected that after the counter-trend reaction a new low/high will be made.
Here is a practical example:
We can observe that at all 3 points, there were local confirmed highs (local meaning the most recent prior peak/low in the index) and all 3 led to new highs/lows after the reversal from Sentiment extreme value.