FEAR AND GREED INDEX 65
The Fear & Greed Index (found on cnn.com) is one of the easiest indicators to use to determine current market emotion. The simple to read gauge (highlighted in our publication When to Buy and When to Sell: Combining Easy Indicators, Charts, and Financial Astrology - available on Amazon), is measured in a range from 0-100, and currently reads 65, as of the close on Friday, May 17, 2024.
This figure sits in the middle portion of the “GREED” category, 15 points above “NEUTRAL,” moving up about 17 points from last Friday’s close at 48. It was a very positive week that progressed upward each day. This was supported by the +82 point incline in the S&P 500, from 5,222 to 5,303 - approximately 1.5 %. It is also significantly higher than the closing reading of 33 (FEAR) just one month ago, after the index lost approximately 230 pts from April 12-19. The steady incline supports a change in sentiment, somewhat affected by the recent gain of confidence for a potential interest rate cut by the Fed in the near future, and falling bond yields, which remains to be seen if it can be sustained.
The change from “neutral” sentiment to “greed” indicates a more “risk-on” approach with investors, since the recent lows in mid-April. Generally, as this indicator moves consistently across the middle of the gauge, in either direction, it suggests a solid short-term trend (currently bullish). Conditions appear lower risk than a few weeks ago, but investors should be increasingly aware of “overbought” conditions should the meter move into the “Extreme Greed” level. The VIX, which is another popular sentiment indicator, measuring market volatility, also dipped below 12, which is a very low reading, suggesting investor indifference. Historically, the volatility will rise when this low level is reached.
Astrologically, it was no surprise that the markets turned upward following the Jupiter-Uranus conjunction (see our Traders Transit blog dated 4-3-24) in the sign of Taurus (money). The beginning of April became increasingly volatile, as expected, with the Mercury Retrograde period that started on April 1, and lasted through April 26 (see our Planet Power blog dated 4-1-24). These periods, which occur 2-3 times per calendar year, are almost always met with a great deal of market indecision and wild price swings. It can be very difficult to swing trade during the retrograde period, and this occasion was no different. The long-anticipated Jupiter-Uranus conjunction also took place on April 20, while Mercury was still retrograde. Jupiter, is known to symbolize expansion, and Uranus symbolizes sudden, unexpected, events, as well as the technology sector. This conjunction, occurring in the sign of Taurus (money), also signified unpredictable market reversals. Also, as Mercury had completely moved out of its retrograde and “shadow” period, and moved into Taurus, markets calmed and resumed their bullish trend.
