Investor Sentiment Indicates Stock Market Remains Precarious
Investor Sentiment Indicates Stock Market Remains Precarious. We use investor sentiment as a contrarian indicator of market direction because the average investor historically is usually wrong.. Although the short-term CNN Fear/Greed index is now registering extreme fear on the part of investors, we believe that as a contrarian indicator that this is not yet a signal that it is time to buy. History tells us the market for the short-term and intermediate-term despite the major drops has not reached an oversold level. So be careful.