To The Moon

The Fear and Greed Index is a comprehensive indicator that better captures investor sentiment. This tool calculates overall market sentiment based on multiple sub-indicators (including market momentum, price strength, price breadth, etc.). The Fear and Greed Index provides users with analytical data on investors' feelings about market sentiment. Note that this index does not constitute any investment recommendations or advice.

1.How is the Fear and Greed Index calculated?

The Fear and Greed Index is calculated based on publicly available market data. The score is synthesized from sub-indicators such as market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe-haven demand. This index tracks the degree to which these sub-indicators deviate from their average values and compares it to the extent to which they typically deviate. In calculating a score from 0 to 100, the index assigns equal weight to each indicator, with 100 representing the highest level of greed and 0 representing the highest level of fear.

2.How often is the Fear and Greed Index calculated?

The Fear and Greed Index and its component indicators are calculated once a day and updated after the close of each trading day.

3.How to use the Fear and Greed Index?

• Extreme Fear (0-24)

Meaning: Investor panic, large-scale asset sell-off, stemming from significant adverse factors, market outlook is pessimistic.

Investment advice: The market is currently oversold, and some quality assets may have been mistakenly punished. For long-term investors, it is advisable to gradually accumulate quality assets at lower prices after a strict assessment of the asset fundamentals; while short-term investors should remain cautious, as there may be rebound opportunities, but the market uncertainty is high, and entering hastily poses significant risks. It is better to wait for clear reversal signals in the market before considering participation.

• Fear (25-44)

Meaning: Investor sentiment is negative, selling pressure is high, confidence is undermined by adverse factors, and conservative investment begins.

Investment advice: The investment portfolio can be optimized by reducing holdings in assets that are heavily influenced by the macro environment and have unstable performance, while increasing holdings in more defensive assets, such as consumer staples, utility stocks, or high-quality bonds. At the same time, closely monitor market dynamics and policy changes to identify undervalued investment opportunities.

• Neutral (45-55)

Meaning: Market sentiment is stable, buying and selling are balanced, investors are waiting for more information to determine investment direction.

Investment advice: Maintain the balance of the existing portfolio and avoid significant adjustments. Pay appropriate attention to the development dynamics and potential investment opportunities in emerging industries, making small exploratory investments, but do not be aggressive; remain patient and wait for the market trend to clarify.

• Greed (56-75)

Meaning: Investor sentiment is positive, willingness to chase rising prices is strong, the market is rising, and investors are willing to take risks for profit.

Investment advice: The market is heating up at this time, but caution is needed regarding the risk of chasing highs. Gradually reduce holdings in assets that have risen too much and are overvalued to lock in some profits. At the same time, appropriately allocate some assets with lower correlation to the market, such as gold, to diversify risk and prevent significant losses from a sudden market correction.

• Extreme Greed (76-100)

Meaning: Investors are overly optimistic, ignoring risks and frantically chasing highs, market frenzy, asset prices may become inflated.

Investment advice: Significantly reduce the allocation of risky assets, such as reducing stock holdings and increasing cash reserves. For investment projects that have already generated substantial profits, consider fully exiting. Avoid participating in excessively speculative assets to prevent significant asset depreciation due to market bubble bursts, and wait for the market to return to rationality before seeking new investment opportunities.

The Fear and Greed Index is mainly used to measure the level of optimism or pessimism in the market. Although this indicator helps users gain insight into changes in investor sentiment towards the market, it cannot predict market direction. Over time, this indicator can be used to help users identify market sentiment during bullish or bearish periods. Investors should not rely solely on a single indicator or study to make investment decisions, but should consider multiple indicators or studies as much as possible when making investment decisions.