Understanding the Stock Market Fear & Greed Index
Warren Buffett famously advised investors to "be fearful when others are greedy, and greedy when others are fearful." This is the core principle behind the Fear & Greed Index.
It is a sentiment indicator that gauges the overall emotional state of the stock market, oscillating between extreme Fear and extreme Greed.
Smart investors know that markets are interconnected. While tracking stocks, you should also monitor our Crypto Sentiment Index for high-risk assets, or check the Gold Fear & Greed Index to see if money is flowing into safe havens.
By tracking these emotions, the index helps investors understand when the market might be overbought (due to greed) or oversold (due to fear), providing a valuable perspective on potential market extremes.
How to Interpret Fear and Greed Sentiment Ranges
- Extreme Fear (0-25): Widespread pessimism and potential capitulation. This often indicates that stocks are oversold and could represent a buying opportunity for contrarian investors.
- Fear (25-45): Investors are showing general caution. There is a "risk-off" sentiment, where money may be flowing out of stocks and into safer assets like bonds.
- Neutral (45-55): The market is balanced, with no strong emotional pull in either direction. This often occurs during periods of price consolidation as investors await a new catalyst.
- Greed (55-75): Growing optimism and a "risk-on" sentiment are prevalent. Investors are actively buying stocks, and the appetite for higher-risk growth stocks often increases.
- Extreme Greed (75-100): High levels of euphoria and complacency. This can be a sign that the market is overbought, assets may be overvalued, and a correction could be due.
Frequently Asked Questions (FAQ)
Does Extreme Fear mean the stock market will crash?
Not necessarily. Historically, "Extreme Fear" (below 20) often indicates that investors are too pessimistic. According to Warren Buffett, this is often the best time to buy
"Be greedy when others are fearful".
However, it requires confirmation from other indicators before entering.
How to use the Fear & Greed Index for S&P 500 trading strategy?
Many traders use a contrarian strategy: They look for buying opportunities when the index is below 20 (Extreme Fear) and consider taking profits or hedging when the index rises above 80 (Extreme Greed).
💡 Pro Tip: Don't rely on the number alone. Check the Volume trend below to confirm if the fear is real.
How often is the "Current Sentiment" updated?
Our server fetches and updates the latest data every 5 minutes during market hours. The trend arrow shows the change compared to the previous market close.
What is the data source?
The live data and recent history are fetched from our API. The deep historical data (from 2011) has been compiled from reputable financial data sources. We analyze multiple factors including Market Momentum, Stock Price Strength, and Market Volatility (VIX).
Is this financial advice?
Absolutely not. This dashboard is an informational tool designed to provide a perspective on market sentiment. It should not be used as the sole basis for any investment decisions. Always conduct your own thorough research.
Trading stocks, cryptocurrencies, and commodities involves a high level of risk and may not be suitable for all investors.
The content on FearGreedIndex.org is strictly for EDUCATIONAL AND INFORMATIONAL PURPOSES ONLY.
It should NOT be considered financial or investment advice. We do not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
