Lots of Fear and Greed Out There

The Fear & Greed chart I made shows extreme fear.

What Typically Happens When the Fear & Greed Index Hits 22?

According to the historical data from FinHacker's Fear & Greed Index study (2011–2026), a reading of 22 out of 100 is classified as Extreme Fear. It signals unusually negative investor sentiment, but it does not necessarily mean the stock market has bottomed.

What the historical data tells us

FinHacker.cz

What usually happens next?

1. Short-covering rallies become possible. When sentiment is this negative, a positive catalyst can produce a sharp rebound as bearish traders cover positions.

2. Volatility often stays elevated. A market experiencing extreme fear can produce large rallies followed by equally aggressive selling.

3. The market can continue falling. Extreme Fear is not the same as maximum fear. The historical index has reached zero, and readings can remain depressed during prolonged corrections.

4. Potential buying opportunities develop. Deeply negative sentiment can be a useful contrarian indicator, particularly when price action, breadth and volatility begin to stabilize.

5. A sustainable recovery needs confirmation. Watch whether the S&P 500 begins establishing higher lows, market breadth improves and the VIX retreats.

These are general market tendencies, not measured forward-return probabilities from the FinHacker study.

The most important question: What happens to the S&P 500 after a reading of 22?

The FinHacker page gives us the historical distribution of Fear & Greed readings, but it does not establish the percentage of times the S&P 500 rises or falls following a reading of 22.

To answer that statistically, we would need to examine every historical occurrence of a reading of 22 or below and calculate subsequent returns.

For trading purposes, I would focus on four forward periods:

My interpretation for Monday: A 22 reading suggests the market is deeply defensive, which creates conditions for an oversold rally. But after last week's damage in ES and NQ, I would be cautious about assuming that the first rally is the start of a sustained recovery.

Bottom line: Extreme Fear can create an opportunity, but the reading alone does not tell us when to buy. The more meaningful historical statistic would be the S&P 500's win rate, average gain or loss, and maximum drawdown over the next 1, 3, 5 and 10 trading days after the index falls to 22 or below.

The Real Rotation

It's been a rough four weeks with last week tipping the iceberg over.  I don’t think this is over and if you look at the bonds and notes, it's clear that the major rotation isn’t buying the Russell or Dow and selling the S&P, it's buying treasuries and selling stocks / tech / AI.

I have to be honest, the two studies below are not my work, I pulled it from Yahoo Finance but I did ask ChatGPT to reorganize it. Here is the original link:

finance.yahoo.com/markets/article/tech-stocks-are-now-cheaper-than-the-sp-500-for-the-first-time-since-2017--heres-what-history-says-comes-next-chart-of-the-day-130131812.html

Four Straight Losing Weeks: History Favors a Rebound, but Semiconductor Stocks Are Flashing a Warning

Chart 1 

Chart 1: What happens after four straight losing weeks?

Since 1990, the S&P 500 has experienced 33 streaks of four or more consecutive weekly declines. Historically, the market has performed better than normal following these periods of selling.

• One month later: The S&P gained a median 1.9%, compared with a normal 1.2% gain.

• Three months later: The median return jumped to 6.0%, nearly double the normal 3.2%.

• Six months later: The S&P gained a median 10.3%, versus the typical 5.7%.

• One year later: The median gain was 16.5%, compared with the historical 11.9%.

Even more interesting, the S&P 500 was higher three months later approximately 80% of the time.

The takeaway: Four straight losing weeks have historically created opportunities for investors willing to ride out the volatility. However, these are median returns, not guarantees. During the dot-com collapse and the 2008 financial crisis, stocks continued declining despite similar oversold conditions.

Semiconductor stocks have taken a historic beating

Chart 2 

The second chart shows just how severe the recent selling in chip stocks has become.

The Philadelphia Semiconductor Index (SOX) has fallen approximately 29% over five consecutive losing weeks, placing the current decline alongside some of the worst semiconductor selloffs in more than three decades.

What stands out is that the current semiconductor decline is approaching the magnitude of moves associated with the dot-com collapse, the 2008 financial crisis and the COVID crash.

Much of the selling reflects concerns about excessive AI infrastructure spending, stretched expectations and the possibility that data-center expansion could slow.

But there is another important development: technology stocks in the S&P 500 are now trading at approximately 17 times forward earnings, compared with 18 times for the broader S&P 500, making technology cheaper on that valuation measure for the first time since 2017. Tech traded at roughly 32 times forward earnings at its October 2025 peak.

The Market Is Trying to Repair the Damage. This Time, Liquidity May Be Helping.

After another violent week, buyers are reclaiming important levels while liquidity and dealer positioning begin recovering from their lows. Is this the beginning of a more durable rally, or another squeeze waiting to fail?

Last week was a reminder of just how quickly this market can change its mind.

We went from deeply oversold conditions to a nearly 200-point reversal, watched that recovery fall apart, and then went straight back into another risk-off leg. Buyers and sellers both had opportunities, but anyone who became too attached to one direction probably had a difficult time navigating the swings.

What we witnessed was months of repricing compressed into just a few trading sessions.

And underneath all that price action, liquidity was deteriorating, dealer positioning remained depressed, and the market was becoming increasingly reactive rather than directional.

That's a difficult environment to trade, particularly if you're trying to predict every move.

But something has started to change.

Buyers are reclaiming important technical levels, liquidity has bounced from its lows, and dealer positioning is beginning to recover. None of that guarantees the correction is over, but for the first time in a while, we're seeing some of the ingredients necessary for a more durable recovery.

I'm beginning to lean more bullish than bearish. But buyers still have some work to do.

The Roadmap Was There Before the Move

One of the reasons I spend so much time developing the Market Blueprint is that I don't want to be figuring out what a move means while it's already happening.

Friday gave us another example of why that preparation is important.

We identified 7370–7375 ES as the level sellers needed to break, with 7320–7325 as the next downside objective.

Price ultimately traded down to approximately 7329, coming within a few points of that target before buyers stepped back in.

Now, we didn't need to predict that exact low. The important part was recognizing what a break of support could produce and having the next area identified before the market got there.

That's the difference between reacting to a planned scenario and chasing a move after it's already underway.

This morning, buyers have reclaimed 7420–7425, which was our first bullish repair level from Friday.

That reclaim changes the immediate conversation.

The next upside objective is 7470–7475, followed by 7490–7500. That second area deserves particular attention because it lines up closely with the November 3 low and the declining four-hour 21 EMA, currently near 7495.

We have horizontal structure and a declining moving average converging in approximately the same area. That's a location where I want to pay attention to how buyers respond, rather than automatically assume the market will continue higher.

Price remains inside the broader corrective structure, so we shouldn't confuse a recovery with a confirmed trend reversal.

But buyers are stabilizing near the lower portion of the larger rising channel, and they're beginning to reclaim levels instead of simply bouncing from them.

There's a distinction worth understanding.

A market can bounce because selling becomes temporarily exhausted. That's not necessarily the same thing as buyers regaining control. When price begins reclaiming former support and resistance levels, holding above them, and building on those advances, the technical picture becomes more constructive.

If buyers continue stacking reclaimed levels instead of immediately surrendering them, we may be looking at something more durable than another one-session squeeze.

Liquidity Is Beginning to Tell a Different Story

Last week, I kept coming back to the deterioration underneath price.

Liquidity had fallen to its weakest levels since July, dealer positioning remained depressed, and the market was increasingly sensitive to relatively small changes in positioning and order flow.

That helps explain why the swings became so violent.

When liquidity is thin, price can move a considerable distance without requiring the same participation we might expect in a healthier environment. Buyers can produce an aggressive reversal, only for sellers to regain control just as quickly.

We've watched that happen repeatedly.

But there was another development last week that caught my attention.

Thursday reportedly produced the heaviest single day of retail selling.

Think about that for a moment.

For months, retail investors had been conditioned to buy every dip. Every pullback presented another opportunity, and more often than not, buyers were rewarded for stepping in.

But this time, they didn't.

The same buyers who had been absorbing every decline for months were suddenly stepping aside or selling into the weakness.

That kind of behavior can be a sign of an overcrowded trade beginning to recalibrate. Positions that once felt comfortable become difficult to hold, and investors who had grown accustomed to quick recoveries begin questioning whether the next one is coming.

Here's where it gets interesting.

Bottoms often begin forming when weaker buyers finally give up.

Not because heavy selling automatically creates a bottom, but because the market sometimes needs to work through excess positioning before a more sustainable recovery can develop.

When participants who were buying every dip finally stop defending their positions, some of the selling pressure hanging over the market can begin to exhaust itself.

That doesn't mean everyone who sold Thursday was wrong. It means the behavior of market participants may be changing, and that change deserves our attention.

Now consider what we're seeing this morning.

Liquidity has bounced from its lows, and dealer positioning has started to recover.

That provides a more constructive backdrop for the stabilization we're seeing in price.

But I want to be careful about how we interpret it.

One bounce in liquidity doesn't erase the deterioration we've been tracking. Just as one strong green candle doesn't establish a new bullish trend, a short-term improvement in positioning doesn't automatically mean the market has repaired the underlying damage.

Ideally, we want to see liquidity begin improving while price is still making lower lows. That kind of divergence can provide an early indication that conditions underneath the market are improving before price fully reflects the change.

In this case, we're seeing liquidity recover from an extreme alongside a developing price recovery.

That's encouraging, but the next step is confirmation.

If liquidity continues improving with price, buyers will have a stronger foundation for extending the recovery. If price rallies while liquidity begins deteriorating again, I'll become more skeptical of the move.

The relationship between the two is something I'll be watching closely.

A Bounce Is One Thing. Repairing the Structure Is Another.

I think it's important to remember how we arrived here.

Last week, the market was deeply oversold. Buyers produced a nearly 200-point reversal, and for a moment it looked like the recovery might have some staying power.

Then the repair failed.

Sellers regained control, the market rolled over, and we found ourselves right back in a risk-off environment.

That's why I'm not interested in declaring that the correction is over simply because we've reclaimed one important level.

Sellers have done enough damage that the burden of proof remains with buyers.

At the same time, refusing to acknowledge improving conditions because the market was bearish last week would be making the opposite mistake.

Markets change. Our job is to recognize those changes and adjust accordingly.

React, don't predict.

Right now, the technical structure is beginning to improve, and some of the underlying liquidity conditions are moving in the same direction.

That combination has my attention.

The question is whether buyers can turn this initial recovery into a sequence of successful repairs.

The Bullish and Bearish Roadmap

Here's how I'm approaching the next move.

The Bullish Scenario

Buyers need to defend the reclaimed 7420–7425 ES area.

As long as that holds, 7470–7475 remains the first upside objective.

That's our immediate test.

If buyers can convert that area into support, the next important zone becomes 7490–7500, where the November 3 low and the declining four-hour 21 EMA near 7495 create an additional technical obstacle.

Acceptance above that area would strengthen the argument that buyers are doing more than producing a temporary relief bounce.

From there, the larger 7550–7560 objective comes into focus.

The important part isn't simply whether price reaches those levels. It's how the market behaves when it gets there.

Do buyers defend the areas they've reclaimed? Are pullbacks finding support? Does liquidity continue improving alongside the advance?

Those are the developments that would give me greater confidence in the bullish scenario.

The Bearish Scenario

If buyers lose 7420–7425, the immediate repair begins to weaken.

A subsequent failure below 7370–7375 would put 7320–7325 back in play.

And if sellers manage to break that area, 7270–7275 becomes the next downside objective.

That would suggest the market is still struggling to establish a durable foundation and that the broader corrective structure remains firmly in control.

This is why I want to see buyers prove themselves rather than assume the recovery will continue.

We have the roadmap in both directions. There's no reason to marry either scenario.

Last week, the market was telling us to respect the risk-off environment.

Liquidity was deteriorating, positioning was depressed, and price was producing violent reversals that repeatedly failed to develop into sustained moves.

We also witnessed what may have been an important change in investor behavior. The dip buyers who had absorbed decline after decline for months were no longer stepping in with the same conviction.

When crowded positioning begins to unwind, the resulting repricing can be violent. And sometimes, the conditions necessary for a bottom begin developing precisely when the investors who were most confident in buying every dip finally give up.

This morning, the picture is beginning to change.

Buyers have reclaimed the first important repair level. Price is stabilizing near the lower portion of the larger rising channel, and liquidity and dealer positioning are beginning to improve from their extremes.

For the first time in a while, the ingredients underneath the move are looking a little more constructive.

That has me leaning more bullish than bearish.

But leaning bullish doesn't mean blindly buying every pullback or assuming the correction has ended. It means recognizing that the evidence is beginning to favor a recovery while remaining prepared to change that assessment if buyers fail.

The first test is 7470–7475.

The bigger test is whether price and liquidity can keep improving together.

If buyers can continue reclaiming and defending important levels, the upside roadmap expands. If those repairs fail, we already know where the downside risks begin to reassert themselves.

That's why we build the roadmap before the move.

We don't need to predict the outcome. We need to recognize what the market is doing and be prepared to respond.

Let them prove it.

React, don't predict. 👊

— Manny Payano

Goldman Sachs Clients Are Optimistic—But More Cautious—About 2027

John Waldron with host Allison Nathan on Goldman Sachs Exchanges

Investors and business leaders are generally optimistic about the outlook for 2027 even as geopolitical uncertainty, inflation, and higher interest rates have prompted greater caution relative to the beginning of 2026, according to John Waldron, president and chief operating officer of Goldman Sachs.

The higher cost of capital and of doing business is a challenge for companies, Waldron says on the Goldman Sachs Exchanges podcast. At the same time, he says, “there's plenty of good things going on”—particularly in the US, where nominal economic growth is robust and the consumer is resilient.

“Most companies are seeing pretty strong end demand, and we still have very strong earnings. So I'm still on the side of optimism when I think about our clients and what they're feeling,” Waldron says.

Companies are increasingly turning to mergers and acquisitions (M&A) as they seek scale, which brings with it the ability to attract more capital and generate better returns. Waldron expects corporate M&A to grow 30%-35% in 2026, which he says could make 2026 a record year for M&A. He views this as a sign that executives are positive about their companies and the operating environment. “CEOs are not going to do M&A transactions if they're not feeling confident in their own business.”

Will US Stocks Follow Their Historical Pattern after Midterms?

The S&P 500 fell Thursday after the US midterm elections sparked a selloff in tech stocks. The volatility raises the question: Will US equities follow their usual historical pattern of rallying after the midterm polls?

Across 18 midterms, the S&P 500 index rose on average 7.5% through year-end, 13.9% over six months, and 15.5% over 12 months, according to Goldman Sachs FICC and Equities. In all 18 instances, the S&P 500 was higher both six and 12 months after the midterms.

The Nasdaq 100 fell about 5% on Thursday and the S&P 500 declined 3%. “We are not seeing buyers step in to defend anything just yet,” John Flood, head of Americas Equities Execution Services in Goldman Sachs FICC and Equities, wrote in a note on Thursday.

Globex: Buyers recover from the early low

Friday’s ESZ6 session started Thursday evening at 7359.00, and sellers pressed their advantage quickly. The 6:15 p.m. ET five-minute bar reached 7322.25, the low for the entire session. That early break did not keep extending. By the 9:00 p.m. interval, ES was trading back around 7390.00, with that bar closing at 7394.75. The recovery was real, but it was not a straight line.

At midnight, the five-minute bar closed at 7393.75. The 3:00 a.m. interval subsequently traded down to 7378.75 before closing at 7381.75. Buyers then made another push, carrying the contract to the overnight high of 7427.25 during the 4:35 a.m. bar. That put the Globex range at 105.00 points, with the low and high separated by more than ten hours.

The market backed away from that high ahead of the cash opening. The 8:00 a.m. bar closed at 7384.25, before ES recovered to finish Globex at 7394.50. Overnight volume totaled 477,450 contracts. The handoff was 35.50 points above the evening open, but 32.75 below the overnight high. Buyers had repaired the initial break; they still had to prove they could hold a higher range once regular trading began.

Cash trade: The early rally gives back ground

ES opened regular trading at 7394.50 and printed the cash-session low of 7392.00 in the opening five-minute bar. Buyers then took it to 7469.00 during the 9:50 a.m. interval, establishing the day’s high within the first half-hour. The move extended well above the overnight peak, but the subsequent trade was two-way. The 10:00 a.m. bar closed back at 7438.25; at noon, another pullback left the five-minute close at 7434.25.

The 1:00 p.m. interval closed at 7408.75. A rebound brought the 2:00 p.m. bar close to 7432.00, but ES was back at 7424.50 at the end of the 3:00 p.m. interval. The 3:50 p.m. bar opened at 7415.00 and closed at 7398.25. The final cash-session bar ended at 7400.00, leaving regular trading up just 5.50 points from its open after a 77.00-point range.

Cleanup trading finished at 7404.00 in the final bar before 5:00 p.m. Regular-session volume was 1,323,406 contracts, with another 72,328 in cleanup and 1,873,184 for the full session. Official ES settlement was 7402.00, up 19.00 points from Thursday’s 7383.00. NQ settled at 27085.25, up 333.25 points, or 1.25%, from 26752.00; its full-session volume was 848,817 contracts. Buyers recovered from the overnight low, but most of the early cash rally did not hold. The lesson from the tape is straightforward: an opening extension and a sustained advance are different things.

A buying pulse, but no one-way auction

The Reveal for the MOC on November 6 was $0.0 billion to buy, or just $11.1 million net: essentially balanced, with roughly $4.1 billion on each side. Buying then built to $1.1 billion by 3:54 p.m., faded, and flipped to $278 million to sell at 3:58. The final 4:00 update returned to $245 million to buy. The 3:55 p.m. period through the close is usually discretionary traders closing out the day; that is context, not identification of these orders.

The Reveal’s biggest sellers clustered in chips: Nvidia led at $225.8 million, followed by Micron and KLA. Financial names added pressure. Apple’s $313.8 million buy imbalance pulled the other way, with Tesla and Amazon also prominent buyers. This was rotation between heavyweight names, not a clean, coordinated technology bid.

Information Technology carried $730.0 million net to sell and Financials $479.2 million. Consumer Discretionary’s $571.3 million buy imbalance, Communication Services and Health Care provided offsets. Overall, buyers outnumbered sellers 355 to 320, but the modest breadth advantage masked sharp sector disagreements. Real Estate even had more buying symbols while its dollars leaned sell. Those sector readings describe the Reveal, not the final close.

My read: a two-way auction with a buying pulse that could not hold its early strength. The final indication favored buyers, but the reversals and concentrated selling kept it from looking like broad conviction. Next time, watch whether buying persists across successive updates and pulls more groups into agreement.

Want to follow the auction pressure behind this recap? Explore the MIM’s live imbalance snapshots and sector view.

How the NYSE and Nasdaq auctions work
How to read the MIM

Manny Payano — The Market Open

Monday, November 9: Manny Payano is on the working Pit lineup at 9:15 a.m. ET.

Watch Live Futures Trading with Manny — November 9.

Don’t trade the open alone. Join us live in The Pit for free, follow the conversation, and bring your questions.

Economic Calendar

Monday, November 9. All times Eastern.

The BLS calendar lists no release today. CPI and real earnings for October are scheduled for Tuesday at 8:30 a.m.

Earnings Calendar

Selected earnings scheduled for Monday, November 9. All times Eastern; call times are distinct from results-release times.

Polaris Trading Group

Polaris Trading Group’s Friday, November 6 session focused on stabilization after the prior selloff. David began with a recovery framework and a capital-preservation reminder. The opening developed a bullish lean, but the day ultimately became a balance-and-consolidation session rather than a completed three-day recovery cycle.

Opening plan and risk

• Before the cash open, David identified an overnight bounce toward 7420 and framed Friday as Cycle Day 3. His stated three-day objective was a return toward the Cycle Day 1 low at 7490. That was a planning reference, not a claim that the market reached it.

• The accompanying reminder emphasized capital preservation. The practical tone was to protect capital while assessing whether a recovery could gain traction, rather than assume the prior decline had finished.

• At 9:33 a.m. Eastern, David described a neutral opening.

Buyers gain the early initiative

• At 9:39 a.m., David said buyers were taking an early initiative, while identifying 7415–7420 as the area they needed to reclaim and hold. The requirement to hold mattered as much as the initial move.

• By 9:45 a.m., the opening-range assessment carried a bullish lean. At 10:20 a.m., David defined a 7430–7460 trading sandbox, then identified 7430 as the initial-balance midpoint at 10:29 a.m.

• At 10:52 a.m., David continued to describe buyers as in control.

Support and the next upside condition

• At 11:01 a.m., David characterized the session as a market-after-trend-day environment seeking stabilization. That shifted the emphasis toward balance and recovery rather than an uninterrupted directional move.

• At 11:19 a.m., the support reference was 7425–7430. The next minute, David called for clear-and-convert action above 7445 to support another push higher.

• Until that condition appeared, he said shorts could be considered. By 11:39 a.m., he described a struggle in the 7445–7455 area.

Closing assessment

• Late in the session, David described Cycle Day 3 as balance and consolidation.

• At 3:37 p.m., he judged the reduced-volatility and stabilization objective accomplished. His 3:50 p.m. update nevertheless said the three-day cycle had failed.

• The distinction is the central lesson from Friday: stabilization can succeed without completing the larger recovery objective.

DTG Room Preview

The DTG group is watching whether ES can reclaim the broken intermediate-term channel while treating the nearby downside trendlines as conditional support. Overnight large-trader volume was too light for the group to establish a whale bias.

Resistance and the bullish test

• The group places the intermediate-term channel boundary at 7437.00–7442.00. A sustained move above it would turn the focus from resistance toward a possible support test.

• The source identifies the 200-day moving average at 7449.75 as another nearby resistance reference.

• Higher trendline resistance references are 7720.00–7725.00 and 7886.00–7891.00, well beyond the immediate test.

Downside watch

• DTG’s short-term channel supports are 7314.00–7317.00 and 7270.00–7275.00.

• The group’s conditional bearish scenario is further downside if sellers clear both support areas. These are the source’s technical reference levels, not confirmed trade outcomes.