ABOUT THIS PROJECT

v1.0.0

WHAT IS THE CONTRARIAN SIGNALS TERMINAL

This project was born from a personal curiosity on how well existing and widely known contrarian indicators perform. Inspired by a renaissance of dense interfaces, the Contrarian Signals terminal distills and agreggates a few of this indicators to surface patterns that often precede market reversals.

CONTRARIAN WISDOM

  • "Be fearful when others are greedy and greedy only when others are fearful."
    —Warren Buffet
  • “Markets can remain irrational longer than you can remain solvent.”
    —John Maynard Keynes
  • “You can’t buy what is popular and do well.”
    —Howard Marks
  • “Mimicking the herd invites regression to the mean."
    —Charlie Munger
  • “You are neither right nor wrong because the crowd disagrees with you. You are right because your data and reasoning are right.”
    —Benjamin Graham
  • "In investing, what is comfortable is rarely profitable."
    —Robert Arnott

Data Sources

  • CNN Fear & Greed Index

    Daily composite indicator capturing market emotion through volatility, momentum, safe haven demand, and options activity. Extremes below 25 or above 75 historically flag capitulation and euphoria.

  • AAII Sentiment Survey

    Weekly poll of American Association of Individual Investors members measuring bullish versus bearish spreads. When bearish sentiment dominates, markets are often close to durable bottoms.

  • BofA Sell Side Indicator

    Monthly gauge of Wall Street strategist equity allocations. Historically reliable contrarian signal when allocations move above 60% (excess optimism) or below 50% (deep pessimism).

Methodology

Our approach aligns with a core contrarian investing principle: extreme sentiment precedes major market turns. We monitor for clustering signals—when several independent indicators register fear, we prepare to buy; when greed appears across the board, we rotate risk down. The terminal distills raw data into high-confidence alerts without removing the investor’s judgement from the process.

FREQUENTLY ASKED QUESTIONS

FAQ
Contrarian investing goes against prevailing sentiment. Buying when fear dominates and selling when greed takes over positions investors for outsized returns when markets mean-revert from emotional extremes.
The index blends seven market inputs—from stock breadth to options activity—into a 0-100 score. Readings below 25 indicate extreme fear while values above 75 signal extreme greed. We track the level, trajectory, and rate of change to contextualize daily moves.
Every week the AAII asks members if they are bullish, bearish, or neutral over the next six months. We focus on the bull-bear spread: spreads below -20% often align with market bottoms, while +20% suggests excessive optimism.
The indicator has a strong contrarian record. When strategists cut equity exposure below 50%, forward 12-month returns often exceed historical averages. Allocations above 60% have preceded several major drawdowns.
We look for confirmation across indicators. Persistent fear across multiple datasets points to oversold conditions where scaling into risk makes sense. Broad greed calls for de-risking or raising hedges.
These indicators excel at identifying swing and positional extremes, not intraday pivots. They work best when integrated with risk management and medium-term strategies rather than minute-to-minute trading.