Fear and Greed Index - Investor Sentiment | CNN (2024)

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Stock Price Breadth is based on the McClellan Summation Index. A minor calculation change was made recently to improve this indicator and overall score for Fear & Greed Index.



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What emotion is driving the market now?
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7 fear & greed indicators

market momentum

S&P 500 and its 125-day moving average

S&P 500

125-day moving average

It’s useful to look at stock market levels compared to where they’ve been over the past few months. When the S&P 500 is above its moving or rolling average of the prior 125 trading days, that’s a sign of positive momentum. But if the index is below this average, it shows investors are getting skittish. The Fear & Greed Index uses slowing momentum as a signal for Fear and a growing momentum for Greed.

stock price strength

Net new 52-week highs and lows on the NYSE

A few big stocks can skew returns for the market. It’s important to also know how many stocks are doing well versus those that are struggling. This shows the number of stocks on the NYSE at 52-week highs compared to those at 52-week lows. When there are many more highs than lows, that’s a bullish sign and signals Greed.

stock price breadth

McClellan Volume Summation Index

Market breadth strong

Market breadth weak

The market is made up of thousands of stocks. And on any given day, investors are actively buying and selling them. This measure looks at the amount, or volume, of shares on the NYSE that are rising compared to the number of shares that are falling. A low (or even negative) number is a bearish sign. The Fear & Greed Index uses decreasing trading volume as a signal for Fear.

put and call options

5-day average put/call ratio

Options are contracts that give investors the right to buy or sell stocks, indexes or other financial securities at an agreed upon price and date. Puts are the option to sell while calls are the option to buy. When the ratio of puts to calls is rising, it is usually a sign investors are growing more nervous. A ratio above 1 is considered bearish. The Fear & Greed Index uses a bearish options ratio as a signal for Fear.

market volatility

VIX and its 50-day moving average


50-day moving average

The most well-known measure of market sentiment is the CBOE Volatility Index, or VIX. The VIX measures expected price fluctuations or volatility in the S&P 500 Index options over the next 30 days. The VIX often drops on days when the broader market rallies and soars when stocks plunge. But the key is to look at the VIX over time. It tends to be lower in bull markets and higher when the bears are in control. The Fear & Greed Index uses increasing market volatility as a signal for Fear.

safe haven demand

Difference in 20-day stock and bond returns

Stocks outperforming Bonds

Bonds outperforming Stocks

Stocks are riskier than bonds. But the reward for investing in stocks over the long haul is greater. Still, bonds can outperform stocks over short periods. Safe Haven Demand shows the difference between Treasury bond and stock returns over the past 20 trading days. Bonds do better when investors are scared. The Fear & Greed Index uses increasing safe haven demand as a signal for Fear.

junk bond demand

Yield spread: junk bonds vs. investment grade

Note: The frequent drops of the yield spread on the Junk Bond Demand chart usually appear on the ex-dividend date. The spread typically bounces back after the dividend is paid and normalizes over time.

Junk bonds carry a higher risk of default compared to other bonds. Bond yields – or the return you get on investing in a bond - dip when prices go up. If investors crave junk bonds, the yields drop. Likewise, yields rise when people are selling. So a smaller difference (or spread) between yields for junk bonds and safer government bonds is a sign investors are taking on more risk. A wider spread shows more caution. The Fear & Greed Index uses junk bond demand as a signal for Greed.


What is the CNN Business Fear & Greed Index?

The Fear & Greed Index is a way to gauge stock market movements and whether stocks are fairly priced. The theory is based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect.

How is Fear & Greed Calculated?

The Fear & Greed Index is a compilation of seven different indicators that measure some aspect of stock market behavior. They are market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand. The index tracks how much these individual indicators deviate from their averages compared to how much they normally diverge. The index gives each indicator equal weighting in calculating a score from 0 to 100, with 100 representing maximum greediness and 0 signaling maximum fear.

How often is the Fear & Greed Index calculated?

Every component and the Index are calculated as soon as new data becomes available.

How to use Fear & Greed Index?

The Fear & Greed Index is used to gauge the mood of the market. Many investors are emotional and reactionary, and fear and greed sentiment indicators can alert investors to their own emotions and biases that can influence their decisions. When combined with fundamentals and other analytical tools, the Index can be a helpful way to assess market sentiment.


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Fear and Greed Index - Investor Sentiment | CNN (2024)


How accurate is the fear and greed index? ›

While the Fear and Greed Index is a handy tool, it's not without its critics. Some argue that it oversimplifies complex market dynamics and investor sentiments. It's crucial to remember that the index should not be used in isolation. Like any tool, its effectiveness depends on how it's used and in what context.

How do you interpret fear and greed index? ›

How to use the Fear and Greed Index. As mentioned earlier, the index operates on a scale from 0 to 100, with 0 representing extreme fear, 50 denoting a neutral sentiment, and 100 signifying extreme greed. Typically, extreme fear indicates that investors are pessimistic and may have oversold assets.

What is the neutral fear and greed index? ›

The Fear and Greed Index gauges market sentiment by analyzing various factors such as Bitcoin's dominance, social media activity, market momentum, trends, and volatility. The index ranges from 0 to 100, with 0 indicating extreme fear, 50 signaling neutrality, and 100 representing extreme greed.

What is the highest fear greed index? ›

Index reading ranges from 0 to 100, with 100 representing maximum greed and 0 representing maximum fear. The CNN Fear and Greed Index is a composite index of sentiment-related variables for the US stock market.

What is the difference between fear and greed index and S&P? ›

The Fear & Greed Index Indicators

Stock Price Momentum: A measure of the S&P 500 versus its 125-day moving average (MA). Stock Price Strength: The number of stocks hitting 52-week highs versus those hitting 52-week lows on the New York Stock Exchange (NYSE).

What happens when the fear & greed index is high? ›

It can be used as a tool for making investment decisions. An investor can leverage buying and selling opportunities using this index. Extreme fear can be a sign that investors are too worried, representing a buying opportunity and greedy investors means the market is due for a correction.

What does a score of 50 on the fear and greed index indicates? ›

A score of 0 represents extreme fear, a score of 100 represents extreme greed, and a score of 50, which is in the middle, represents neutral sentiment. A fearful market could indicate a down-trend after a huge sell-off in the market.

How to control fear and greed in trading? ›

You should keep constant track of your investment. With that track, you should be able to assess all your investments and see whether they align with your planned goals or not. Having a trading journal of your investment can help you make analytical decisions while putting your emotions down.

What is the fear and greed ratio? ›

It is calculated by subtracting % of stocks near their 52W low from % of stocks near their 52W high to arrive at the net % of stocks near their 52W high. Higher value indicates better price strength in the market.

What is the current market sentiment? ›

Basic Info. US Investor Sentiment, % Bullish is at 40.82%, compared to 38.49% last week and 24.08% last year. This is higher than the long term average of 37.60%. US Investor Sentiment, % Bullish is an indicator that is a part of the AAII Sentiment Survey.

How to know market sentiment? ›

Investors typically use the 50-day moving average (MA) and 200-day MA when determining a market's sentiment. When the 50-day MA crosses the 200-day MA from below it is called the “golden cross." This indicates that momentum has shifted to the upside, creating bullish sentiment.

What does fear and greed index measure in crypto? ›

The Crypto Fear and Greed Index is a tool that strives to measure the overall sentiment of the cryptocurrency market. It uses a variety of data sources and combines them into a single figure, providing a score from 0 to 100. This score categorizes the market sentiment from extreme fear (0-24) to extreme greed (75-100).

How is the bitcoin fear and greed index calculated? ›

How is the Crypto Fear & Greed Index calculated? The index is calculated using a combination of factors including market volatility, momentum and volume, social media sentiment, Bitcoin's market dominance, and Google Trends data.

How to know crypto market sentiment? ›

Deciphering crypto sentiment: Inside the crypto Fear and Greed...
  1. Volatility: A rise in volatility is used as a sign of a fearful market.
  2. Market momentum/volume: Strong momentum and high volumes suggest greed, while declining momentum and lower volumes indicate fear.
Mar 29, 2024

How is the fear and greed index calculated in crypto? ›

The index is calculated using a range of sources: volatility, market momentum/volume, public sentiment data, dominance, and trends. Each of these signals plays a crucial role in determining the market sentiment.

What is the fear greed index ratio? ›

The index calculates how much each individual variable deviates from its average and assigns equal weights to each variable. Index reading ranges from 0 to 100, with 100 representing maximum greed and 0 representing maximum fear.

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