What is the 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?

Is the S&P 500 a fear and greed index?

There is a high degree of correlation between the S&P 500 and the Fear and Greed Index, which leads to market cycles and corrections. There is also a Cryptocurrency Fear and Greed Index that works on the same principle as stocks.

How do fear and greed affect the stock market?

Fear is what drives investors to flee the market in panic when it turns bearish, and greed is often at the root of "irrational exuberance" that can lead to stock market bubbles. When those sentiments change, from fear to greed or vice versa, it can predict a change in the stock market's direction. The premise of the Fear and Greed Index is that:

What does fear and greed mean?

This is a plot of the Fear & Greed Index over time, where a value of 0 means "Extreme Fear" while a value of 100 represents "Extreme Greed". Why Measure Fear and Greed? The crypto market behaviour is very emotional. People tend to get greedy when the market is rising which results in FOMO (Fear of missing out).