At TrendLabs, we do the work. We’ve run the numbers, tested the data, and lived through the cycles. We know for a fact that asset prices trend. They’re not random.
To someone new to markets, those daily or weekly price swings might look random — and, honestly, I don’t blame them. It definitely feels that way at first.
But after 23 years of doing this, I can assure you there’s nothing random about it. Prices move in trends and repeatable patterns. It’s not magic. It’s math, behavior, and human emotion on display every single day.
Those of you who’ve been following along have seen that play out in real time through our TrendLabs portfolios.
As I’m sure you’ve noticed, there’s an extra layer that gives us a huge edge: understanding sentiment.
The reason this morning note is literally called Everybody’s Wrong is because that’s what we’re constantly hunting for — where prices are doing one thing while the crowd believes another.
That’s our edge. And that’s what I want to talk about today.
The CNN Noise & Clickbait Index
Now, there’s this media outlet called CNN — short for “Cable News Network,” which is adorable because, honestly, who still has cable in 2025?
They’ve been in the “news” business for decades, which these days mostly means producing anxiety for profit. They’ve got journalists writing about politics, the economy, and whatever else keeps your parents’ group chats lively.
But that’s not even the problem. Their real crime is something called the Fear & Greed Index — or, as I like to call it, the Noise & Clickbait Index.
It’s this little gauge they publish that looks like someone actually thought it through. Spoiler: They didn’t. It’s not just useless — it’s misleading. It confuses more investors than it helps.
I’m not saying it’s illegal… but if there were a court for financial misinformation, this thing would be facing life without parole.
And the funniest part? They even tell you how it’s built — assuming, correctly, that no one will ever bother to read it.
But I do…
Construction of the World’s Worst Sentiment Index
There’s no shortage of bad sentiment data out there. Every bot-infested “social media” company claims they’ve cracked the code. But most are just hoping someone with deep pockets won’t notice the numbers don’t actually mean anything.
Still, CNN somehow manages to outdo them all. Their Fear & Greed Index might be the single worst offender.
Here’s the thing about sentiment: It’s mean-reverting. At extremes, emotions eventually swing back the other way. When everyone’s panicking, prices tend to recover. When everyone’s euphoric, prices tend to cool off.
So, if you want a sentiment gauge that’s actually useful, its inputs need to capture those emotional extremes — not just random market data points. Otherwise, it’s not a sentiment indicator at all. It’s just noise.
You know the old line: “garbage in, garbage out.”
And here’s what CNN proudly includes in their version of “sentiment”:
Market Momentum: S&P 500 vs its 125-day moving average
Stock Price Strength: Net new 52-week highs and lows on the NYSE
Stock Price Breadth: Up-volume vs down-volume
Put/Call Options: Ratio of bullish call trading vs bearish put trading
Market Volatility: The VIX
Safe Haven Demand: Stocks vs Treasuries
Junk Bond Demand: Spread between investment grade and junk yields
On the surface, all this might sound reasonable — if you don’t think about it too hard. But once you do, it’s obvious that almost none of these are actually sentiment measures. They’re just market data points dressed up as psychology.
If you’re building a sentiment indicator designed to mean-revert near emotional extremes, why on Earth would you include Price Momentum, Price Strength, or Price Breadth — all of which are the exact opposite of mean-reverting?
Those are trend-following by nature. So including them completely breaks the logic of what a sentiment gauge is supposed to be. That doesn’t make it a little wrong — it makes it misleading.
Those inputs don’t have anything to do with fear or greed. They just reflect the direction and strength of price trends — which, as we’ve proven over and over again, trend, not mean revert.
Now, a few of their components actually make sense. The VIX does a decent job of capturing emotional extremes. High volatility often signals fear, and low volatility reflects complacency. Both tend to swing back the other way.
The Put/Call ratio fits the same mold, which is why we use both in our own sentiment work at TrendLabs. So it’s not all nonsense.
But then you get to the credit spreads. The difference between junk bonds and investment-grade yields absolutely trends over time. It’s not mean-reverting, and it has no business being in a sentiment model.
Finally, the so-called Safe Haven Demand input might be the worst of them all. The idea that bonds automatically act as a “safe haven” when investors get scared is completely outdated.
We saw this plain as day in 2022 — stocks fell, bonds fell even harder. The myth died years ago, but CNN never got the memo.
So, what you’re left with is an index that sounds smart, looks official, and completely misses the point. It’s not a sentiment gauge. It’s a marketing gimmick.
And yet, every day on social media, someone reposts it with great conviction, pretending it means something. They get their clicks. Investors get confused. And the cycle continues.
Now you know why it’s fiction. You can skip the confusion — I just saved you the headache.
It’s Not Politics, It’s Just Math
Finally, I just wanted to mention that this isn’t a political thing. I know how these Sensitive Sallys get when I make fun of the preachers at their church.
But I’d say the same if it were the Newsmax, Breitbart, or FOX Fear & Greed Index. Garbage data doesn’t care who you vote for. It just misleads everyone equally.
And it’s not just CNN doing it. Every day, you see bot-ridden “social sentiment” websites claiming to have cracked investor psychology with data that wouldn’t pass a high school stats class.
It’s all noise. And it’s obvious to anyone who actually runs the numbers.
If you want real sentiment analysis, you’re in the right place. You’re already reading this. You already get it.
You’re ahead of the game. Good for you.
Now go help your friends catch up — and maybe save them from the Noise & Clickbait Index while you’re at it.
Stay sharp,
JC Parets, CMT
Founder, TrendLabs