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FEAR/GREED SENTIMENT INDEX – NOVEMBER 18, 2017

November 18th, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading has a current reading of 44 which is in the “Fear” zone. This allows the market to go in either direction so it is neither a selling or a buying area.

But this indicator continues to move across its range from “Extreme Greed” readings around 90 just a few weeks ago. Recent buying opportunities have come when this indicator gets a reading of 25 or lower.

Today’s “Fear” reading is the first one in a long time and may be suggesting that an oversold/pessimistic bottom is coming in the next few weeks. That would present a chance to get back onboard the market for another ride up to new highs.

FEAR/GREED SENTIMENT INDEX – NOVEMBER 5, 2017

November 5th, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading has a current reading of 66 which is in the “Greed” zone. This allows the market to go in either direction so it is neither a selling or a buying area.

One might think that the market’s continuing rally has to stop and correct at the very least. But it appears that there are still major portions of the general market that have stayed modest in their appreciation and present opportunities for price advances.

But since this indicator was in the “Extreme Greed” area for a long time, it may be working its way toward the “Extreme Fear” area and a buying opportunity a few weeks away from now.

FEAR/GREED SENTIMENT INDEX – OCTOBER 3, 2017

October 2nd, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading has been in the “Extreme Greed” zone for several days now. It has even gone to the far extreme by posting a reading of 90 which probably marks an “internal top” or point of maximum upside momentum.

While this isn’t the only indicator of the market’s condition, it has represented a reliable gauge of market sentiment in the past. When the market is “over-loved” like it is now, it matches both the present overbought (in terms of price action) and overvalued (fundamental) condition.

Together, these 3 gauges confirm that this is highly likely the area of an important top and certainly not a time to become more bullish and hold large bets for more upside appreciation. That doesn’t mean that they market can’t go any higher in terms of price, but it does suggest that it won’t be going up for very much longer. If there is a time to move to the sidelines, this would be one of those.

FEAR/GREED SENTIMENT INDEX – SEPTEMBER 16, 2017

September 16th, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is once again back in the “Extreme Greed” range after being in the “Extreme Fear” zone only a few weeks ago. At the beginning of this week, most of the internal indicators were showing “overbought” conditions. Plus, the market indices are pushing against resistance levels at the top of the price ranges.

All of these point to a time when it’s too late to buy and most likely a good time to sell or lighten up. And while this Fear/Greed Index is showing “Extreme Greed,” it can still move closer to the 90-95 range before exhausting itself to the upside.

Now is a time to start building up cash for the next buying opportunity when this indicator is back in the “Extreme Greed” area. That time is several weeks away.

FEAR/GREED SENTIMENT INDEX – AUGUST 19, 2017

August 19th, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is finally in the “Extreme Fear” range for the second day in a row at 17. This indicator is now suggesting that the general stock market is in a “buying opportunity” zone.

This is a minimum requirement for taking new positions in the general stock market. In the past, it is not unusual for market bottoms to occur when this index is under 10. But overall, the market is close to a bottom and it wouldn’t be such a bad idea to start taking positions on any further weakness even though your “palms are sweaty.”

But in times and opportunities like this, money management strategies are the key to success. In my book, Wall Street Craps: How to Play Today’s Hot & Cold Markets for Fast Money With Less Risk, I write about dividing your investing capital into “chips” or even blocks of money.

For example, if you have $100, divide this amount into 20 $5 chips. Your first bet might be $5 or $10 or 5% or 10% of your investing capital. So the present situation would be one where you make a first bet. This means that the present buying opportunity should only be 5%-10% of your investing or trading capital. This is because you may be a little early at this time and in steep market drops being early can be costly and dangerous.

 

 

FEAR/GREED SENTIMENT INDEX – AUGUST 10, 2017

August 11th, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the “Greed” range at 31. This indicator is now suggesting that the general stock market is approaching a buying opportunity. That signal will be triggered by a reading below 25 in the “Extreme Fear” zone.

Thus as far as sentiment goes, an important signal may come as early as Friday or Monday. This would be a “buy the dip” strategy which one day will prove to be wrong. But this market has been really resilient to declines and until proven otherwise, I’d expect another rally to new highs to occur when this current decline ends.

 

FEAR/GREED SENTIMENT INDEX – JULY 25, 2017

July 26th, 2017 Comments off


The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the “Extreme Greed” range at 81. This indicator is now suggesting that the general stock market is in the danger zone. This means that it’s not the time to buy in order to go long equities. Instead, it’s a probably best to lightened up on extended positions and reduce your risk.

And while the market may correct, bottom, and return to this same price level, it’s usually prudent to begin taking your gains especially when the sentiment is overextended like it is now. When the technicals and the sentiment confirm each other, it’s smart to anticipate an immediate trend change. That doesn’t necessarily mean going short because that in itself is a whole different game to play for most.

Note: A chapter in my book, Wall Street Craps: How to Play Today’s Hot & Cold Stock Market for Fast Money With Less Risk, deals with the unexpected unique challenges of playing the short vs. the traditional long game of stock market investing & the dangers of leveraged short Exchange-Traded Funds.

FEAR/GREED SENTIMENT INDEX – JULY 16, 2017

July 16th, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the “Greed” range at 64. This indicator leaves room for the market to rally further until it reaches unsafe territory in the “Extreme Greed” area.

A few weeks ago, this indicator gave a one-day reading of 25 in the “Extreme Fear” range. That proved to be the bottom in retrospect as this bull market continues to power through. With that in mind, it’s probably wise to avoid any short positions and await the next oversold reading in the breadth oscillators or an “Extreme Fear” reading below 26 in the Fear/Greed Sentiment Index in order to take additional long positions.

But at this point, taking profits would not be such an unwise thing to do in anticipation of the next sharp downdraft with seems likely to occur after an “obvious” piece of good public news (like the passing of the new health act).

FEAR/GREED SENTIMENT INDEX – MAY 31, 2017

May 31st, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading is in the neutral range today despite being at the higher part of the trading range. This could have multiple interpretations. For me, I see this as a potential buy signal after a relatively short period of price weakness. That weakness could translate into “Extreme Fear” in this indicator without too much damage to the present price structure. If we should get a reading in the “Extreme Fear” area accompanied by “oversold” reading in many breadth indicators, we could find another “dip” to ride the market up for another spectacular rally. Until proven otherwise, continue to look at “oversold” and “under-loved” conditions as opportunities to buy.

FEAR/GREED SENTIMENT INDEX – APRIL 14, 2017

April 15th, 2017 Comments off

The “Fear/Greed Sentiment Index: What Emotion is Driving the Market Now?” reading has finally moved into the “Extreme Fear” range this past week. But it is just touching that area and I would expect a reading under 20 in order to feel like it is truly registering “Extreme Fear.”

But this indicator is now saying that it’s time to start thinking about accumulating pilot positions for the next rally. The challenge is that there hasn’t been much price erosion in the market since its March top. Hence, many positions are still well over their 200-day moving averages with plenty more room to correct.

I’d look at this indicator as simply a sign to start thinking about going long the general market and use other breadth indicators to fine-tune the timing. And many of the breadth indicator are starting to flash buy alerts as well. So a bottom is close at hand unless we rally quickly to lessen the downward pressure.