What is the fear & greed index?

The Fear & Greed Index uses slowing momentum as a signal for Fear and a growing momentum for Greed. 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.

How do you measure fear & greed?

The CNN Business Fear & Greed Index is another good tool that measures daily, weekly, monthly, and yearly changes in fear and greed. It is used as a contrarian indicator that examines seven different factors to establish how much fear and greed there is in the market, scoring investor sentiment on a scale of 0 to 100.

Are greed and fear affecting the stock market?

Greed and fear are among the animal spirits that Keynes identified as profoundly affecting economies and markets. Warren Buffett found an investing rule in acting contrary to such prevailing moods, advising that the timing of buying or selling stocks should be "fearful when others are greedy and greedy only when others are fearful."