The Tactical Investing Fear Index
A proprietary market-fear indicator that condenses the state of the market into a single number on a 0–100 scale. Low readings reflect calm, risk-on conditions; high readings signal acute market stress. It exists in two regional versions — one for the United States, one for Europe — built on the same methodology.
What it measures
The index expresses how much stress the market is currently pricing in. It is deliberately a single number: the point is to make the state of the market legible at a glance, so that a rule written months ago can be applied without interpretation.
- Low readings reflect calm, risk-on conditions.
- Elevated readings signal rising stress and warrant a more defensive posture.
- Extreme readings indicate acute market dislocation.
How to read the scale
The number is a ranking rather than a raw measurement. A reading of 60 means market fear has been calmer than this in roughly 60% of the past and more intense in the other 40%. That is what keeps the scale readable: the same number carries the same meaning in any market environment, whether volatility is generally high or generally low.
Two bands anchor the range:
These are guide values for reading the scale, not fixed rules. In PortfolioLab every strategy defines its own thresholds and decides what each zone should hold — the index supplies the reading, the rules stay yours.
What goes into it
The index blends three complementary signals into one reading:
- Futures outlook
- What the futures market is bracing for in the weeks ahead: calm or turbulence.
- Volatility level
- How high current market volatility sits versus its normal range.
- Volatility trend
- Whether that stress is building up or fading.
The US version reads VIX futures and VIX indices; the European version reads the VSTOXX curve and VSTOXX indices. Both follow the same methodology — only the source data differs. The exact calculation is proprietary.
For background on the underlying volatility measure itself, see The VIX Explained and What Is a Fear Index?
Two indices: United States and Europe
Both follow the same calculation logic and the same 0–100 scale. What differs is the underlying market data — and, as a result, the moment at which the reading is final.
Backtests always use the closing value. For live use, the US index updates through the trading session, so a rule can be acted on before the close. The European index is published at its close today — intraday updates are coming soon.
Matching the index to the market matters. A strategy's index and its ETFs need to close at the same time — otherwise the signal is acted on at a moment the index was never measured at. That is a structural timing conflict, not a rounding error, which is why the two are never mixed within one strategy.
What it is not
- Not the CNN Fear & Greed Index. An independent, proprietary calculation with no relation to it.
- Not the VIX. The VIX is one input among several in the US version, not the index itself.
- Not a forecast. It describes conditions now. It does not predict returns and makes no claim to.
- Not an intraday signal. It tracks daily market conditions; intraday moves are noise it is not designed to capture.
- Not investment advice. See the Terms of Service.
How it is used
In PortfolioLab, the index drives rules the user writes themselves. You define zone thresholds — for example, below 60 growth assets, 60 to 90 defensive, above 90 capital preservation — and assign an allocation to each. When the index crosses a threshold, the strategy calls for the allocation belonging to the new zone. Between zone changes nothing happens.
The platform computes the signal. It never places an order: every trade is executed by the user with their own broker. Backtests run from 2015.
Questions
What is the Tactical Investing Fear Index?
It is a proprietary indicator that condenses the state of the market into a single number on a 0–100 scale. Low readings reflect calm, risk-on conditions. Elevated readings signal rising stress and warrant a more defensive posture. Extreme readings indicate acute market dislocation. It exists in a US and a European version, both built on the same methodology.
Is it the same as the CNN Fear & Greed Index?
No. The Tactical Investing Fear Index is an independent, proprietary calculation and is not related to, derived from, or affiliated with the CNN Fear & Greed Index. The two are built differently and will not agree.
Is it just the VIX with another name?
No. The VIX is one of several inputs to the US version, not the index itself. The Fear Index also weighs what the futures market is bracing for in the weeks ahead and whether stress is building or fading — dimensions a single volatility number does not capture.
What does a reading of 60 mean?
The scale is a ranking: a reading of 60 means market fear has been calmer than this in roughly 60% of the past and more intense in the other 40%. In practice, 60 to 70 marks elevated fear — the band where most strategies begin rotating out of growth assets — and readings above 90 mark extreme fear, where capital preservation takes priority. These are guide values, not fixed rules: in PortfolioLab every strategy defines its own thresholds.
Is there a Fear Index for Europe?
Yes. The European version follows the same calculation logic and the same 0–100 scale as the US version — the difference is the underlying market data and the time of day at which it is finalised. It reflects European market sentiment and closes at the European market close, which makes it the better signal for European ETF positions.
How far back does the history go?
Backtests in PortfolioLab run from 2015. The free tier includes the full history.
Does it predict market crashes?
No. The index describes current market conditions; it does not forecast returns and makes no claim to. It is also not designed for intraday use — it tracks daily market conditions, and intraday price moves are noise it is not built to capture.
Where can I see it?
Inside PortfolioLab, the platform built around it. A free tier exists, which includes backtesting against the full history from 2015.