How to measure greed vs fear ?

Discussion in 'Strategy Building' started by bayinvestor, Apr 21, 2009.

  1. bayinvestor

    bayinvestor

    Hi,

    How to measure greed vs fear ?
    I heard people use VIX as fear indicator, is there an indicator for greed ?

    Thanks.
     
    #1     Apr 21, 2009
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  2. nazzdack

    nazzdack

    1) A rising VIX is indicative of fear(pessimism).
    2) A declining VIX is indicative of greed(optimism)
    3) Extreme greed is reflected by "high" P/E ratios(>25), "low" dividend yields(2%<) and when the VIX is below 10. :cool:
     
    #2     Apr 22, 2009
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  3. epetrov

    epetrov

    The slope of rising prices is a measurement for greed.
    The slope of dropping prices is a measurement for fear.
     
    #3     Apr 22, 2009
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