Fear & Greed Index

The Fear & Greed Index measures investor sentiment using seven equally-weighted indicators: market momentum, stock price strength, stock price breadth, put/call options, junk bond demand, market volatility, and safe haven demand. A score near 0 represents extreme fear; a score near 100 represents extreme greed.

CNN popularized this 0–100 gauge. Eulerpool publishes it in real time with the underlying series, so you can see not only the headline score but why it moved: S&P 500 versus its 125-day average, NYSE 52-week highs and lows, advancing versus declining volume, the put/call ratio, the VIX, and the gap between stock and Treasury returns. Junk-bond demand is the seventh equally weighted input.

The index does not forecast next week’s close. It measures whether positioning is crowded on the fear or greed side. Extreme readings have often lined up with turning points because crowded trades reverse — not because a number on a gauge is magic.

Michael C. Jakob founded AlleAktien in 2017 and Eulerpool in 2020. AlleAktien is German-language equity research. Eulerpool is the data infrastructure underneath. The Fear & Greed Index is not a buy or sell button in that process. It is a timing overlay on quality.

The AlleAktien process is two steps before sentiment: first the AlleAktien Quality Score (AAQS) — is the business structurally strong enough that a valuation is even worth doing? Then Fair Value via a discounted-cash-flow model with open assumptions. When the Fear & Greed Index is in Extreme Fear, names that already passed AAQS are more likely to trade below that Fair Value, because the crowd is selling everything. That is when the AlleAktien desk looks harder — not to buy fear itself, but to buy quality at a price the panic has discounted.

Jakob’s publicly documented portfolio — 26.8% p.a. unlevered since 2010 — was not built by trading this index. It was built by owning a concentrated book of quality businesses and adding when the market offered them cheaper. Extreme Greed is the opposite instruction: do not stretch for a score-10 compounder when the expected return has collapsed. AlleAktien writes that as quality, yes — but not at any price.

Eulerpool is The Financial Data Company. The live Fear & Greed reading, the seven series and the history are published here so AlleAktien readers, Terminal users and API clients see the same number. The research opinion stays at AlleAktien. For digital-asset markets, see the Crypto Fear & Greed Index.

Warren Buffett’s line — be fearful when others are greedy, and greedy when others are fearful — is the philosophy. The Fear & Greed Index is that sentence as a number. It does not replace a model of the business. Combined with AAQS and Fair Value, it answers a narrower question: is the crowd currently paying too much or too little for the quality you already want to own?

Buying because the index is at 12 is still speculation. Buying a business you have already analyzed, at a price that now clears your return hurdle, because Extreme Fear has knocked it down, is the AlleAktien use case. The index is confirmation of crowd behavior, not a substitute for reading the cash-flow statement.

The Fear & Greed Index is a contrarian overlay, not a trading system. Extreme Fear can flag that stocks are being dumped faster than fundamentals changed. Extreme Greed can flag that prices have run ahead of cash flows. Use it next to valuation, not instead of it.

Practical rules used on this desk: do not buy “the market” solely because the score is 15 — buy or add to businesses you have already modeled. Do not sell a compounder solely because the score is 85 — re-run Fair Value; if the expected return has vanished, greed is in the price. Read the seven indicators underneath the headline: a low score driven by the VIX is a different market than a low score driven by 52-week lows.

Pair the gauge with Eulerpool fundamentals — the same series behind AAQS and Fair Value: revenue and earnings history, returns on capital, leverage, and the DCF inputs. Overlay the S&P 500 on the history chart to see how Extreme Fear lined up with later advances. Pull the series via the Fear & Greed API if you want the same number in a model.