PROTECTED SOURCE SCRIPT
Updated
The Fear & Greed index (advanced) is a comprehensive and customizable technical analysis tool designed to gauge market sentiment and identify potential buying or selling opportunities. This advanced version of the Fear & Greed Index incorporates a wide range of market data and technical indicators, providing traders with a more nuanced and sector-specific view of market sentiment. Key Features:
- Sector-specific analysis: The script automatically determines the sector based on the ticker data in TradingView, allowing traders to assess market sentiment for specific sectors. Users can also manually select a different sector to analyze, such as Technology, Healthcare, Energy, or Consumer Discretionary.
- Additional components: This advanced Fear & Greed Index includes several new components not found in other versions, such as sector performance, Fast and Slow EMA comparison, VIX/VIX3M ratio, and the number of S&P 500 stocks above their 20-day EMA. These additional data points provide a more comprehensive view of market sentiment.
- Sector performance: The script calculates sector performance by determining overbought and oversold areas, helping traders identify potential entry and exit points for sector-specific trades.
- Customizable components: Users can enable or disable individual components of the Fear & Greed Index, allowing them to fine-tune the indicator to their specific needs and preferences. Tooltips are provided to explain each component in detail.
- Component plotting: Traders can choose to plot particular components of the Fear & Greed Index directly on their charts, providing a visual representation of specific market sentiment factors.
- Color-coded chart: The Fear & Greed Index chart is color-coded to clearly show bullish (green) or bearish (red) trends, making it easy for traders to identify potential market shifts at a glance.
- Index calculation methods: Users can select between two index calculation methods: Volatility Adjusted Index and Composite Z Score. This flexibility allows traders to choose the method that best suits their trading style and market analysis preferences.
- Volatility-weighted components: The script assigns weights to each component based on market volatility, ensuring that the index adapts to changing market conditions and provides a more accurate representation of sentiment.
How it works:
The Fear & Greed index combines data from multiple market indicators and technical analysis tools to create a comprehensive sentiment score. The script fetches data for each component, such as sector performance, market volatility, and put/call ratios, and normalizes the values to ensure a consistent scale.
Users can customize the index by enabling or disabling individual components, allowing them to focus on the factors they consider most relevant to their trading strategy. The script then applies a volatility-weighted formula to the enabled components, giving more weight to components that demonstrate higher volatility, as these tend to have a more significant impact on market sentiment.
The resulting Fear & Greed Index score is plotted on a color-coded chart, with green representing bullish sentiment and red indicating bearish sentiment. The script also detects divergences between the index and price action, alerting traders to potential trend reversals or market shifts.
By providing a comprehensive, sector-specific, and customizable view of market sentiment, the Fear & Greed Index helps traders make informed decisions and identify potential opportunities across various market conditions and timeframes.
We encourage you to provide feedback, ideas, and suggestions for improvements to help us continue refining this indicator and better serve the trading community. Your input is valuable in shaping the future development of the Fear & Greed index.
Release Notes
New Components Added:
- Measures the percentage of stocks trading above or below their moving averages.
- Indicates a bullish or bearish trend based on the proportion of stocks above or below their moving averages.
- Measures market breadth by comparing the number of advancing and declining issues.
- Suggests a bullish or bearish trend based on the oscillator's value.
- Compares the strength of the US Dollar (DXY) against major currencies like the Euro (EURUSD) and Japanese Yen (USDJPY).
- Indicates the potential impact of currency strength on stock prices.
- Measures the momentum of oil prices using a simple moving average (SMA).
- Suggests bullish or bearish momentum in oil prices based on the current price relative to the SMA.
- Measures the momentum of gold prices using a simple moving average (SMA).
- Suggests bullish or bearish momentum in gold prices based on the current price relative to the SMA.
- Measures the rate of change of the US Dollar Index (DXY).
- Indicates the strength or weakness of the US Dollar based on the rate of change.
- Compares the number of stocks making new 52-week highs to those making new 52-week lows.
- Suggests a bullish or bearish trend based on the relative number of stocks making new highs or lows.
- Measures the short selling volume of the SPY ETF.
- Indicates bearish sentiment when short selling volume is high and bullish sentiment when it is low.
Dmytro S.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
