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FEAR/GREED SENTIMENT INDEX – OCTOBER 3, 2017

October 2nd, 2017


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.

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