At times, the Fear & Greed index is a somewhat-useful indicator of market sentiment, particularly at extremes. But somehow it's showing 'extreme fear' at the moment despite the S&P 500 being just 1.8% off the all-time high set just last week.
On the face of it, that should be a strong buy signal for stock markets. What it's picking up on is terrible breadth in the stock market, a swing in the put-call ratio, the FIX at 23.7, falling Treasury yields and junk bond demand. The problem is that these numbers are stochastic and we're coming off a period of euphoric returns so they're benchmarked against an impossible metric.
