What is fear and greed index?

What is 'Fear And Greed Index'. The fear and greed index was developed and used by CNNMoney to measure the primary emotions that drive investors: fear and greed. The Fear and Greed Index is based on seven indicators: 1. 2. 3. Stock Price Breadth - as measured by trading volumes in rising stocks against declining stocks.

What is the difference between fear and greed?

An excessive amount of fear can cause stocks worldwide to fall below levels at which they’re fairly priced from a fundamental or economic perspective. Excessive greed leads to the exact opposite, driving stock prices to unsustainable levels. Every day, these two emotions are shown on a scale from 0 (extreme fear) to 100 (extreme greed).

How to gauge greed and fear in the stock market?

There is also another available index that can gauge greed and fear developed by CNNMoney. This index is based on seven indicators: Safe Haven Demand, Stock Price Momentum, Stock Price Strength, Stock Price Breadth, Put and Call Options, Junk Bond Demand, and Market Volatility.

Is fear back in the stock market?

Extreme fear is back in the stock market, according to CNNMoney's Fear & Greed Index. Just how bad is it? The index has a 100 point scale -- with 0 indicating nightmare level fear and 100 signaling "buy everything in sight" greed. On Monday, the Fear & Greed Index fell to 7.