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Fear and Greed Index: Markets in Extreme Fear As Recession Looms

The CNN Money Fear and Greed index shows that the US stock markets are in a state of extreme fear. This is largely because of the steep drops seen in the Dow Jones, S&P 500 index and the Nasdaq 100 index in the first half of 2022.

At 24.0, the index has dropped from the Fear Levels of 29.0 that the market participants had a month ago. It is also 9 points lower than where the markets were a year earlier. The classical saying by Warren Buffett is playing out as traders are dumping their stocks in panic. 

On Monday, the global financial markets were hit by risk aversion. However, this wore off as the US trading session got underway. The Dow Jones Industrial Average recouped a significant portion of its earlier losses but still ended the day 0.18% lower. The Dow Jones Futures are currently down 0.15%, pointing to a lower open this Wednesday.

The FOMC’s minutes of its June meeting are due for release tonight. That document’s contents will determine traders’ expectations for the 28 July meeting. This could also affect the US markets and the Fear and Greed Index.

Dow Jones Index Outlook

A breakdown of the 30627 support sends the pair toward the 30100 support level. Below this price mark, 29670 (17 June low) serves as an additional target to the south. 28969 and 28184 are other southbound targets, being formed by prior lows of 12 November 2020 and 15 October 2020, respectively. 

On the flip side, a break of 31282 allows the bulls access to the 32464 resistance target (2 May low). Before this level, the 32000 psychological price mark forms a pitstop. Additional northbound targets are found at 33370 (30 May 2022 high) and 34084 (5 May 2022 high). 

CNN Money Fear & Greed Index