The Fear and Greed Index -- not to be confused with the VIX -- is at 92 out of 100 today and will likely climb higher if the markets hold their morning gains. The S&P 500 is trading at $1954.34 +4.90 on the day.
Near-Term Pull Back
History has shown us that readings above 90 dictate at least a near-term pull back in the markets. In recent weeks, the S&P 500 has climbed to all-time record highs. Every minor negative issue has been swept under the rug and caused nothing more than a one or two day pull back. Investors continue to believe that the markets will never go down. This is even true for mega hedge fund players like David Tepper who just last week gave the 'all clear' to investors for further significant market upside. Every media outlet is pumping the upside and the bears have all but vanished.
Investors should be looking at this like a contrarian indicator. Simply put, if history is any indicator, with a Fear and Greed Index reading of 92, it is likely the markets will pull back slightly.
