How to Read the Fear & Greed Index
You've probably heard on the news that 'the market is in a state of fear.' Let's look at where that judgment comes from — and whether you can take it at face value.
What the Fear & Greed Index Is
The Fear & Greed Index is a sentiment gauge that expresses, as a single number, how much market participants' emotions lean toward fear or greed. The most widely known is the one created by CNN.
It is shown as a value between 0 and 100 — lower means fear, higher means greed. The idea was inspired by Warren Buffett's famous line: 'Be fearful when others are greedy, and greedy when others are fearful.'
What It Measures: 7 Indicators
The CNN index combines 7 different indicators.
① Stock price momentum: where the S&P 500 stands relative to its 125-day moving average ② Stock price strength: comparing the number of stocks hitting 52-week highs versus 52-week lows ③ Stock price breadth: comparing the volume of advancing versus declining stocks ④ Put/call options ratio: the ratio of bearish bets (puts) to bullish bets (calls) ⑤ Market volatility: the volatility gauge (VIX) known as the fear index ⑥ Junk bond demand: the yield gap between risky bonds and safe bonds ⑦ Safe-haven demand: demand for stocks relative to Treasuries
Each indicator is standardized by how far it has deviated from its own recent average, then combined with equal weight.
The component indicators and threshold values can differ slightly by source. Commonly, below 25 is 'extreme fear,' 25–45 fear, 45–55 neutral, 55–75 greed, and above 75 is 'extreme greed.'
The Right Attitude Toward the Gauge
This index is merely a tool that summarizes 'what emotional state the market is in right now' — it is not a predictive device that tells you the future direction.
'Buy at extreme fear and sell at extreme greed' sounds like a simple rule, but in reality extreme fear sometimes leads to even deeper fear, and greed sometimes persists far longer. Trying to time trades with a sentiment gauge alone easily falls into the trap of market timing.
A healthier use is to treat this index as a 'mirror for checking your own emotions.' When the market is at extreme greed, ask whether you too are getting excited and overreaching; at extreme fear, ask whether you too are about to panic-sell. This site likewise does not predict specific timing and focuses on showing long-term data regardless of emotion.
常见问题
Q. If the Fear & Greed Index is low, should I buy now?
You can't conclude that. The index only summarizes current emotion; it can't predict the future. Extreme fear could end in a few days or continue for several more months. Rather than using it mechanically as a buy signal, it's safer to judge based on your own asset allocation plan and a manageable drawdown.
Q. Is there a similar index for cryptocurrency?
Yes, there is a separately operated Fear & Greed Index for cryptocurrency. But crypto has far greater volatility and different market characteristics, so its component indicators and interpretation differ too. Either way, it remains a 'thermometer of emotion,' not a predictive tool.
📋 结果基于历史数据计算,过去的收益不代表未来的收益。
📋 本服务旨在帮助理解投资、供教育之用,并非投资建议。