Investors are driven by two emotions: fear and greed

Investors are driven by two emotions: fear and greed. Too much fear can sink stocks well below reasonable levels. When investors get greedy, they can bid up stock prices way too far. CNN's fear and greed index takes into account seven indicators when considering overall market sentiment which include: Stock price momentum, stock price strength, volumes, the put/call ratio, junk bond demand, volatility & US treasury demand. The index looks at how far each have veered from their average and then spits out a score based on a 0-100 scale where 0 is extreme fear and 100 is extreme greed. According to the index the US is currently experiencing the extreme fear phase, which if you believe it, could mean that the bold are buying. (VIEW LINK)