FEAR & GREED INDEX 21
The Fear & Greed Index (found on cnn.com) is one of the easiest indicators to use to determine current market emotion. This 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 21 as of the close on Friday, April 18, 2025.
This figure remains in the Extreme Fear level, though now nearing the edge of Fear, as it rose 8 points from last weeks close of 13. The market has reacted to the historically low reading of 4 (less than 2 weeks ago), as we address in our publication and often in our weekly blogs. As noted, the market usually reacts to the furthest extremes with some type of reversal (with high probability). During this week, the S&P 500 decreased about 81 points from 5,363 to 5,282, due to the large decline on Wednesday. Though it seems contradictory that the S&P fell but the Fear & Greed Index rose, the reading simply suggests that there was not as much panic, likely due to the recent sharp decline, and expectations that a bottom is near. The four major indexes, which includes the S&P 500, Nasdaq, Dow Jones Industrial, and Russell 2000 (small cap index) remain deep in bear market territory as well over 50% of their components continue to trade under their 50, 100, and 200-day moving averages.
The “Risk-Off” sentiment continues, as selling days seem to consist of the “sell stocks and hold cash” strategy, rather than the “sell stocks and buy bonds” strategy, known as “Flight to Quality.” 10-year bond yields decreased by weeks end to 4.33%, after beginning the week at 4.5%. The current stock and bond market declines, at the same time, is an oddity, as the fears of recession and inflation are an anomaly, causing the larger cash positions. Consumer Confidence and Sentiment remaining at record lows does not help.
The 7 internal factors used to formulate this index are listed on the screen (below):
Market Momentum – (S&P 500 vs its 125-day moving avg) = EXTREME FEAR
Market Volatility (measured by the VIX) = NEUTRAL
Put to Call Ratio 5-day avg. (# of Puts (bearish) vs Calls (bullish) = EXTREME FEAR
Stock Price Strength (# of new 52-week highs vs new 52-week lows) = EXTREME FEAR
Stock Price Breadth (# of shares rising vs falling on NYSE) = EXTREME FEAR
Safe-Haven Demand (which measures stocks vs bonds) = EXTREME FEAR
Junk Bond Demand (non-govt. bond yield spread) = NEUTRAL
This week, 2 of these 7 factors changed levels, as 5 of the 7 remain in the Extreme Fear category. With Market Momentum, Market Volatility, and Safe Haven Demand all in Extreme Fear, patience is a virtue until conditions improve. As we have warned for several weeks, stock selection remains the key with continued weak underlying conditions.
The VIX itself, measured by Market Volatility, decreased 7.9 points, ending the week at 29.6, (from 37.5), which is significant, and correlates with the Fear & Greed Index rising, suggesting slightly less nervousness. Uncertainty continues, however, as the tariff negotiations continue to change, and the VIX is still rather high for the markets liking, though considered Neutral under 30.
Earnings season began again this week, as financials kicked it off with mainly positive results. The semiconductor sector, however, overshadowed early earnings with the reported export restrictions placed on industry leader Nvidia (NVDA) regarding China, which is believed to be 15% of their business. Despite the companies promise to move all production to the United States, the stock price plunged 7%, severely dragging down the markets. As discussed in our Financial Focus – When the Chips are Down blog, dated 3-13-25, semiconductors heavily influence short-term market action. Currently, on average, just shy of 25% of all stocks contained within the 4 major indexes are trading over their 200-day moving averages, (a slight improvement from 22% last week), indicating we are still in bear market territory. Remember, as we have warned for several weeks, any bullish price action may be temporary, so proceed with caution as a potential bottom is being established.
Astrologically, as noted for the past several weeks, the planet Mars has now returned to the sign of Leo as of Friday, April 18, where it will remain for another 2 months until mid-June. This signifies a return to the sign position of early November to early January, when markets reached their highs after the election. Mars in Leo symbolizes aggressive action as well, which has started to be evident with many global leaders becoming stubborn and combative regarding the tariff situation.
Aries season (March 21 – April 19), symbolizing fiery, determined, action-taking energies (Mars ruled), ends today, giving way to Taurus season, a less aggressive, more “grounded” sign. Please review our Sign Language – Taurus Season blog, dated 4-7-25 for more details.
With all the planets now “direct,” the energies are more reflective of their norm, for the time being, hopefully bringing a bit more consistency in the markets. The “Sell in May and Go Away” seasonal concept is upon us, however, as noted in last year’s blog, dated 4-15-24, that effect has not held true nearly as much in recent years, with July becoming the 2nd best performing month of the year. Venus (money) does remain in the sign of Pisces a bit longer until April 30, signifying the lingering Piscean energies of confusion, that the equities market can’t seem to shake. Mercury, however, re-entered Aries yesterday, April 19, possibly rejuvenating the aggressive moves in communication sectors. With the tariff situation still hanging over the global economy, expect more tumultuous price action for the time being, each and every time comments are made, though some clarity may be on the horizon.
As Aries “season” fades into the sunset for another year, the usual calm of Taurus season would be welcome. Watch the VIX closely, as a steady drop would support less volatile price action, which is more suitable for swing trading. We do continue to promote reducing share size on holdings for those with a shorter-term investment time frame, until the coast is clear.
Leading sectors were difficult to identify with the recent extreme wild swings of the market, and, ideally, it is usually important for financials, technology, and industrials, to lead the way for a sustained rally. Recently, the only sectors showing any strength are Consumer Staples and Utilities (which normally lead in negative economic times), and Gold/Silver. In the long run, sectors of the technology industry are likely to continue their advance into the future, including AI, robotics, quantum computing, and space development (with Pluto in Aquarius, and Uranus upcoming ingress to Gemini in mid-2025).
Gold (ruled by the Sun), and Silver (ruled by the Moon), resumed their upswing this week, with gold reaching All-Time Highs (ATH). Mars’ transit through Cancer, which resulted in gains on the previous occasion (from early September to early November of 2024), is now over as of Friday, April 18 (now in Leo), so don’t be surprised by a pullback. As we have expressed in recent months, however, any dip in these metals has been short-lived, and they continue to be long-term buying opportunities on any such declines. The Gold to Silver Ratio (covered in our publication) ended slightly higher at 102 this week, after closing at 100.3 last week, indicating silver continues to be a better value buy than gold.
***As always, this information is not intended to be financial advice, or any specific buy or sell recommendation, but rather a guide to assist the reader in some further understanding of current economic conditions/movements in the sky, and how they can affect moods, behaviors, world events, and financial markets.
