The fear and greed index was developed by CNNMoney to measure two of the primary emotions that influence how much investors are willing to pay for stocks.
The fear and greed index is measured on a daily, weekly, monthly, and yearly basis. In theory, the index can be used to gauge whether the stock market is fairly priced. This is based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect.
Be fearful when...