Fear & Greed Index

The Fear & Greed Index is a composite sentiment indicator that combines several individually-tracked market signals — recent price momentum, market breadth, volatility (VIX level and trend), put/call ratios, junk-bond demand, and safe-haven flows — into a single 0-100 score. Zero is "extreme fear"; 100 is "extreme greed"; 50 is neutral.

Each component is normalized against its own recent history, then blended with equal weights. A reading of, say, 30 doesn't mean "the market is 30% fearful"; it means the current blend of signals sits 30% of the way up the distribution between the most-fearful and most-greedy readings in the reference window.

As a contrarian signal the record is mixed. Extreme fear readings have historically clustered near market bottoms more often than not, and extreme greed readings near short-term tops more often than not — but the index gives no timing: an index in extreme fear can stay extremely fearful for weeks. More useful as a framing device ("what kind of regime is this?") than as a trigger.