CNN "Fear & Greed Index"

[GreenEggs]

This morning the meter is at 80. That's the highest that I've seen since following it. Maybe "something" is getting ready to happen?

[NW-Bound]

Quote:

Originally Posted by GreenEggs This morning the meter is at 80. That's the highest that I've seen since following it. Maybe "something" is getting ready to happen?

The 7 components of this index are conflicted.

Junk bond demand: Extreme greed
Market momentum: Extreme greed
Safe haven demand: Extreme greed
Market volatility: Neutral
Put and call options: Neutral
Stock price strength: Extreme fear
Stock price breadth: Extreme fear

Meanwhile, the futures are down this morning, prior to market open.

[teetee]

My solution to the fear is simple (and arguably elegant): if you think you have put money in at the record high, be prepared to keep investing into it every month/year for the next xx years (xx > 10).

But don't go put large amount of money into penny or obviously over valued stocks and hold me responsible for it when you got nothing in return after 10 years.

Consistent investing over impulse buy any day.

[Montecfo]

I do notice there are misusing some info, and some missing. Momentum for example is bullish not bearish.

And nothing about sentiment or commodities.

Also, if you do not invest at or near market highs you will be on the sidelines a lot.

Stay Fully Invested.

[NW-Bound]

Quote:

Originally Posted by Montecfo I do notice there are misusing some info, and some missing. Momentum for example is bullish not bearish. And nothing about sentiment or commodities. Also, if you do not invest at or near market highs you will be on the sidelines a lot. Stay Fully Invested.

Yes, momentum is bullish, which they say is greedy.

To be fair, they do not claim this is a buy/sell signal, but greed/fear. You have to decide to go with the flow, or to be a contrarian.

[jollystomper]

Quote:

Originally Posted by OldShooter Really, the gadget is clearly the product of someone trying to create today's click bait. The fact that its underlying indicators are equally weighted is prima facie evidence that no covariance analysis has been done. A serious effort would undoubtedly result in unequal weightings, but even that begs the question: What historical data could be used to validate the "measurement?" "too bulliish," "too bearish" -- How do you validate that, not to mention validating their claim that you can profit by "taking the other side?" But, hey, the real objective is to attract eyeballs. That's apparently working for them.

+1

An index created purely to have something to report on in a "dramatic" way.

[Montecfo]

Quote:

Originally Posted by NW-Bound Yes, momentum is bullish, which they say is greedy. To be fair, they do not claim this is a buy/sell signal, but greed/fear. You have to decide to go with the flow, or to be a contrarian.

Yes noticed that. Maybe another way to say it is it is not particular useful to stock investors. But I guess if it induces hand-wringing and fear that could be something of a benefit.

[braumeister]

Many decades ago I subscribed to this timeless advice:

"Believe half of what you see and none of what you hear."

I still think that's an excellent philosophy.

[NW-Bound]

Quote:

Originally Posted by braumeister "Believe half of what you see..."

There's still the risk we choose the wrong half.

[Bigdawg]

Quote:

Originally Posted by Amethyst Geckos are good. ---Gordon Green (I like geckos.)

https://www.geckosislandadventures.com/

A great ATV ride in St Croix. Heading down there again in Nov. Gecko's are good. lol

[kcowan]

Quote:

Originally Posted by braumeister Many decades ago I subscribed to this timeless advice: "Believe half of what you see and none of what you hear." I still think that's an excellent philosophy.

And that was when there was much less to see!

[Fermion]

Throw the book out the window because stimulus makes new rules.

[MichaelB]

<mod note>

Multiple posts have been removed. They were all media bashing and unrelated to the thread topic. This constant sniping at media, usually unrelated to the thread topic, does a double disservice to our community. It interferes with thoughtful discussions and brings incivility into otherwise polite exchange.

[unclemick]

Quote:

Originally Posted by MichaelB <mod note> Multiple posts have been removed. They were all media bashing and unrelated to the thread topic. This constant sniping at media, usually unrelated to the thread topic, does a double disservice to our community. It interferes with thoughtful discussions and brings incivility into otherwise polite exchange.

Heh heh heh - I don't know what to say. It snowed today so I'm inside posting.

[NW-Bound]

Quote:

Originally Posted by GreenEggs This morning the meter is at 80. That's the highest that I've seen since following it. Maybe "something" is getting ready to happen?

Eh people, do not take a peek now, but that meter is now way below 80, a high "Greed" level.

All that in 2 days of trade.

Buy, buy, buy...

NOOOO...

SELL, SELL, SELL...

[NW-Bound]

What ya know, this index has moved from slight Fear to Greed at this moment.

I own a variety of stocks (about 90) in different sectors. Every day, just looking across my portfolio, I get a feel of the Greed/Fear level without the above index.

On a normal day, some positions are red, and some are green. Some days, nearly everything I own is in the red. Big Fear. Sell, sell, sell... On some days, nearly everything I own is green. Like today. Buy, buy, buy...

I am used to Greed and Fear. If the market is greedy a few days in a row, I start to sell covered-call options. If the market is fearful a few days in a row, I start to sell cash-covered put options.

I can handle both Greed and Fear, but I will readily admit that I much prefer Greed to Fear. It's more fun that way. I would rather sell calls than puts.

[NW-Bound]

Eh, it's been 3 weeks already since my last post on this thread. Perhaps people other than the OP have forgotten, but I have not.

What do you know, this arguably dubious index is now at 37, in the Fear Zone.

I just moved about 1/3 of 1% of portfolio into stocks. It's peanuts, I know, but only so that I could claim later that I did buy when others were fearful.

[unclemick]

. Football season is not yet here. Soooo - I may have to add to my 'few good stocks' collection.

Heh heh heh - I still maintain it's a guy thing. Or as Willie Nelson says - 'Not Dead Yet'.

[Koolau]

Quote:

Originally Posted by NW-Bound Eh, it's been 3 weeks already since my last post on this thread. Perhaps people other than the OP have forgotten, but I have not. What do you know, this arguably dubious index is now at 37, in the Fear Zone. I just moved about 1/3 of 1% of portfolio into stocks. It's peanuts, I know, but only so that I could claim later that I did buy when others were fearful.

When there's blood - well, maybe plasma, in the street... etc. and YMMV.

[NW-Bound]

“And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful.” — Warren Buffett

Well, when other people are fearful, I always want to buy. The problem is their fear sometimes seem unbounded, while my cash is not unlimited.

And when they are greedy and bid stocks up to crazy values, I often do not have the same vaporware stocks to sell, and you know it's not wise to sell short.

"The markets can remain irrational longer than you can remain solvent.” -- John Maynard Keynes