The frequency with which people cite the fear and greed index (and the confidence they express when discussing it) reveals much about their approach to markets. The critical questions they should be asking are what price did after hitting extreme values, whether the index has any predictive power for future returns and whether it provides any actual edge. Yet, these are the questions that go unasked. A simple way to test this would be backtesting the common signals people tout, such as buying when the index hits ≤10. Yet most people never bother to test their assumptions. They prefer believing what fits their narrative. It’s almost tragicomic.