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Thursday, October 02, 2014

Fear & Greed Index Hits Record Low of 3

CNNMoney has a sentiment index called the "Fear & Greed Index."   Today the market is terrified by:
Here is a snapshot of the index for today.

Fear and Greed now down to 3!
The second chart below shows this is an all-time record low!

The  Fear & Greed Index is a summation of seven indicators explained in detail here
  1. Stock Price Momentum: The S&P 500 versus its 125-day moving average
  2. Stock Price Strength: The number of stocks hitting 52-week highs and lows on the New York Stock Exchange
  3. Stock Price Breadth: The volume of shares trading in stocks on the rise versus those declining.
  4. Put and Call Options: The put/call ratio, which compares the trading volume of bullish call options relative to the trading volume of bearish put options
  5. Junk Bond Demand: The spread between yields on investment grade bonds and junk bonds
  6. Market Volatility: The VIX, which measures volatility
  7. Safe Haven Demand: The difference in returns for stocks versus Treasuries
"For each indicator, we look at how far they've veered from their average relative to how far they normally veer. We look at each on a scale from 0 - 100. The higher the reading, the greedier investors are being, and 50 is neutral. Then we put all the indicators together - equally weighted - for a final index reading."

Today's Fear and Greed Components 

Fear & Greed Index from 2011 to today

S&P500 from Index 2011 to today

Kirk's Explore Portfolio 1998 to today

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