64, greed. This number is not saying whether prices will rise or fall next; it is saying that, at this moment, most people’s positions are leaning to the same side. The more crowded one side becomes, the more room the other side has to move, and the more likely volatility is to come from the less crowded direction.

So rather than guessing whether this reading will next climb to 70 or pull back to 50, it is better to first look down at your own account: is your position something you added only after seeing 64, or is it already the proportion it should be? The former hands your judgment over to a single number on the screen; the latter is your own decision.

This index moves back and forth between 30 and 80 every week. It records the crowd’s level of comfort, but it does not record anyone’s cost basis. The only thing you truly need to be responsible for has always been the latter.