BiggSmooth

The market is back in extreme fear, so here is the simplest framework for the fear and greed index. Neutral, you hold. Nothing to do, let the positions work. Fear, you start adding. Slowly, into the names you already know and want more of. Extreme fear, you add aggressively. This is where the market hands you prices that have nothing to do with fundamentals, because the selling is emotional, not analytical. The best entries of my entire year have come from this zone. Greed, you start trimming. Take a little off into strength, nobody ever went broke ringing the register. Extreme greed, you trim aggressively. That is when everyone is a genius, the charts only go up, and the exit gets crowded fast. The whole trick is that the index tells you what everyone else is feeling, and your job is to do the opposite of the crowd at the extremes. It is simple to say and brutally hard to do, because extreme fear only shows up when the headlines are at their scariest and adding feels insane. That feeling is the signal. We are in the add aggressively zone right now. Not blindly, not with money you need, and only into theses you have actually checked. But this is the zone where the discipline gets paid. Fear is the discount. Greed is the bill.