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It suggests that investors are fearful in the market, but the action to be taken depends on the MMI trajectory.
If it is dropping from Greed to Fear, it means fear is increasing in the market & investors should wait till it reaches Extreme Fear, as that is when the market is expected to turn upwards
If MMI is coming from Extreme fear, it means fear is reducing in the market. If not best, might be a good time to open fresh positions.