Market temperature (1/14)

The fear and greed index was developed by CNNMoney to measure two of the primary emotions that influence how much investors are willing to pay for stocks.

The fear and greed index is measured on a daily, weekly, monthly, and yearly basis. In theory, the index can be used to gauge whether the stock market is fairly priced. This is based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect.

What emotion is driving the market?

The McClellan Volume Summation Index measures advancing and declining volume on the NYSE. During the last month, approximately 8.36% more of each day's volume has traded in advancing issues than in declining issues, pushing this indicator towards the upper end of its range for the last two years.

Last changed Jan 7 from a Greed rating.

Stocks and bonds have provided similar returns during the last 20 trading days. However, this has been among the weakest periods for stocks relative to bonds in the past two years and indicates investors are fleeing risky stocks for the safety of bonds.

Last changed Jan 12 from an Extreme Greed rating.

The number of stocks hitting 52-week highs slightly exceeds the number hitting lows but is at the lower end of its range, indicating fear.

Last changed Jan 10 from an Extreme Fear rating.