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I Backtested the CNN Fear & Greed Index Across 9,000+ Trades and Here's What the Data Says

backtest.substack.com · 2,007 words · saved by 1 readers

The common wisdom of "buy fear and sell greed" is oversimplified—and sometimes dead wrong

Most investors who have any exposure to financial social or mainstream media have at some point come across the index. It is posted on the CNN website here. The index was begun in 2011. CNN Fear & Greed Index dial reading a score of 29, indicating market sentiment is in the Fear zone. The US Fear and Greed Index (CNN F/G) is constructed from seven indicators of stock market performance. They are measured on a scale of 0 to 100 and an equally weighted average of the seven indicators is calculated. The seven indicators are detailed below: Momentum: The S&P 500 index compared to its 125-day…

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