What Is the Equilytics Mood Index, and How Do You Read It?
Every trading day, Equilytics boils the Indian stock market's mood down to one number between 0 and 100. A low number means fear is dominating; a high number means greed is. This guide explains exactly how that number is built, what each of its six inputs means, and how to actually use it without over-reading it.
The short version
The Equilytics Mood Index averages six signals, each scored 0 to 100: foreign investor (FII) flows, India VIX, Nifty 50 price momentum, market breadth, 52-week highs versus lows, and gold's performance relative to the Nifty 50. The average of whichever signals are available that day becomes the score. Below 25 is Extreme Fear, 25-44 is Fear, 45-55 is Neutral, 56-75 is Greed, and above 75 is Extreme Greed.
Why six signals, not one
A single indicator can mislead. The Nifty could be flat while foreign investors are quietly selling hard, or VIX could spike for a reason that has nothing to do with the broader trend. Averaging six independent signals -- flows, volatility, trend, breadth, extremes, and a safe-haven comparison -- means no single data point can swing the score on its own. If one signal is missing or stale for more than three sessions, it's dropped from the average rather than guessed at.
1. Foreign investors (FII)
The sum of FII net buying or selling over the last 5 sessions. Sustained selling pulls the score toward fear; sustained buying pulls it toward greed.
2. Volatility (India VIX)
How much traders are paying to protect against big swings. A rising VIX is read as fear -- it's the one signal where "up" moves the score down.
3. Momentum
Whether the Nifty 50's short-term trend (30-day average) is running above or below its longer-term trend (90-day average).
4. Market breadth
The share of stocks rising versus falling today, across the whole tracked universe -- not just the index's biggest names.
5. 52-week highs vs lows
Whether more stocks are hitting fresh yearly highs or fresh yearly lows right now.
6. Gold vs Nifty
Gold outperforming stocks over 10 sessions is a classic "flight to safety" signal, so it's read as fear; stocks outrunning gold reads as greed.
How the raw numbers become a 0-100 score
Four of the six signals (FII, VIX, momentum, gold-vs-Nifty) are converted to a 0-100 score by ranking today's reading against the last 250 trading sessions of that same measurement -- so "high" and "low" are defined by the market's own recent history, not an arbitrary fixed number. Until 250 sessions of history build up (which takes time right after launch), a fixed fallback scale is used instead. Breadth and the highs-vs-lows signal are already naturally bounded between 0 and 100 by their own formula, so they're used directly. The full formulas, with every constant, are on the methodology page -- nothing about the calculation is hidden.
The five zones
Extreme Fear (0-24) and Extreme Greed (76-100) are the two ends most worth paying attention to -- they describe moments when sentiment has moved unusually far in one direction. Neutral (45-55) means the six signals are roughly balanced and disagreeing with each other about direction, which is itself useful information: it means there isn't a strong consensus story driving the market right now.
How to actually use it
The Mood Index describes current sentiment -- it is not a forecast and not a signal to buy or sell anything. A useful way to use it: when the score sits in Extreme Fear, that's historically been a period when disciplined, long-term investors have continued their regular SIP contributions rather than pausing them, since lower prices mean the same monthly amount buys more units. When the score sits in Extreme Greed, it's a reminder to check whether your own portfolio's risk has quietly grown alongside the market's enthusiasm. Either way, treat the number as one input among many, read the six signal explanations behind it, and make your own decisions -- Equilytics is not a SEBI-registered investment adviser or research analyst, and nothing here is personalized advice.