‼️ Fear & Greed at 36 with the market at record highs
An unusual combination: indices at or near all-time highs, while the Fear & Greed Index sits at 36 — a “mild fear” zone.
Not panic, but definite caution.
And when sentiment cools while prices remain high, the market tends to become highly sensitive to any scare.
Historically, a 35–45 range has been typical of the “I don’t buy it” phases:
the market rises, but investors don’t fully trust it.
It happened in 2013–2014, in 2018 before the volatility correction, and several times between 2021 and 2025.
The pattern always repeats:
the first bad piece of news doesn’t bring the market down,
the next one soon after does.
Right now, sentiment fits that description perfectly:
high prices, a rally concentrated in a handful of large companies,
low but jittery volatility, and many investors who are in the market but with a finger on the sell button.
This isn’t a sell signal, but it is an environment where downward moves can accelerate quickly.
A weak guidance, a soft macro number, or a slightly less dovish Fed message could be enough to trigger fast selling.
It’s what we call a “perched market”: rising, but without conviction.
That’s why it’s a good time to stay cautious.
It’s not about running for the exits, but about not chasing highs and keeping strategy clear.
Those holding defensive positions or ready liquidity — like us — have the advantage, because opportunities usually appear just when others start to panic.
And speaking of the portfolio: this week has been tough.
Several negative moves aligned across different companies,
and even with plenty of protection in bonds, defensives and cash, we pulled back.
After an exceptional August and September (+17%),
October has brought about -2%, concentrated in a single week.
That’s the market: even the most cautious portfolios face rough days or weeks.
We remain well positioned, and November and December are typically strong seasonal months.
When rotation comes — and it will — flows will move out of the most overvalued names (AI, high-growth stocks) and into companies with real, undervalued fundamentals, as happened in March and April this year, when pharmaceuticals and defensive sectors led the rebound.
The key now is not to be swayed by short-term volatility.
The market may be fearful, but as long as there’s value and a solid strategy behind it, time will always reward patience.
—
I’m Luis Iñigo, an AI developer and investor with over five years of experience. My approach focuses on balancing returns, risk control, and a long-term vision. I share analysis and decisions with full transparency through my Popular Investor profile.
These are my personal opinions and not investment advice. Capital is at risk. Past performance does not guarantee future results.
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Wed Dec 10 2025 13:41:53 GMT+0000 (Coordinated Universal Time)
