Fear and Greed index signals market euphoria, often leading to pullbacks

The Fear and Greed Index is indeed a useful tool to gauge market sentiment. When it flashes a red sign, indicating extreme greed, it often signals that the market might be overvalued and due for a correction. Historically, periods of high market euphoria have been followed by pullbacks.

Fear and Greed index is flashing a red sign today

Indicating a lot of market euphoria

This is usually followed by market pullbacks

Except around Dec 2023 pic.twitter.com/jbOPNyv9wW

— Bravos Research (@bravosresearch) October 25, 2024

2/ Stocks have hit the "extreme greed" level on the fear and greed index

This sentiment measure was developed by CNN pic.twitter.com/xVVuUV2GA4

— Bravos Research (@bravosresearch) October 24, 2024

Sources:

• CNN Business – Fear & Greed Index

• Investopedia – Fear and Greed Index Definition

• MarketWatch – Market Sentiment Overview