FEAR & GREED INDEX 23
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 23 as of the close on Friday, March 21, 2025.
This figure remains in the Extreme Fear level, rising only 2 points from last weeks close of 21, as the market has struggled to regain any traction. As we focus on in our publication and weekly blogs, the market usually reacts quickly (with high probability) the further into extreme conditions the reading becomes, and it currently sits on the outer edge, only 2 points from the Fear line. In another anticipated volatile week, the S&P 500 rose about 29 points from 5,638 to 5,667, after reversing every day, ending with yet another Friday afternoon rally. Remember, the major indexes are still only a few weeks removed from All-Time Highs, and the decline has been quick, ranking as one of the fastest ever corrections of 10% (after ATH). Currently, the four major indexes; The S&P 500, Nasdaq, Dow Jones Industrial, and Russell 2000 (small cap index) remain in bear market territory, as they remain under their 200-day moving averages, and all have less far less than 50% of included stocks trading under their 200-day MA.
The “Risk-Off” sentiment continued for the most part, although some bargain hunters have begun to nibble at leading stocks. 10-year bonds fell slightly, from 4.32%, to 4.25%, as the U.S. Dollar continues to be weak. The current “risk-off” strategy, however, has shifted from the “flight-to-quality” approach of selling stocks to buying bonds, to the more conservative approach of selling stocks and holding cash, as Consumer Sentiment remained low.
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) = GREED
This week, only 1 of the 7 factors changed levels, as 5 of the 7 remain in the Extreme Fear category. As we have warned for several weeks, stock selection remains the key with continued weak underlying conditions. The only change was a shift to Greed (from Extreme Greed) in Junk Bond Demand, which are not government sponsored. These higher risk bonds increased slightly, but are also ex-dividend date sensitive, so the level change effect is minimal.
The VIX, measured by Market Volatility, experienced another volatile week, but did decrease in the second half of the week. Overall, it declined 2.4 points, settling in at 19.3, from 21.7. Investor nervousness and uncertainty is likely to persist as ever-changing tariff news and uncertain economic conditions continues to dominate the price action and sentiment. There was little price momentum in either direction as the VIX bounced around all week. In our Chart Chat – Bull or Bear blog, dated 3-8-25, we noted that the overall market included only 32% of stocks making 90-day highs, well below the 50% bull/bear gauge. That number rose slightly last week, to 37.5%, only based on Friday’s rally, and barely moved this week, ending at 38.8%. Also, the number of equities making 90-day lows and 90-day highs remained very low all week.
This week’s economic news included slightly favorable CPI and PPI reports (which measure inflation) and the continuing “tariff wars” between the U.S. and numerous other countries.The “new” tariff deadline date is April 2, which will be highly anticipated. The FOMC meeting mid-week renewed the suggestion of a mid-year interest rate cut, though it only had a mild effect on the market, as investors try to decipher between an economic slowdown and/or a recession. Negative earnings reports from retail leader Nike (NKE), and shipping giant FedEx (FDX), did not help matters. The daily gyrations further supported our theory that emotion is the main driving factor of short-term market moves. Keep in mind that auto-trading algorithms also kick in around important price levels, and the major indexes are still sitting at the edge, or below, their 200-day moving averages.
Another notable fact, mentioned last week, is historically, after 14 or more days trading under the 8-day Exponential Moving Average (EMA), any pullback in the S&P 500 to that level does not result in a price reversal 95% of the time. Contrarians and bargain hunters should beware that any bullish price action may be temporary for now, so proceed with caution.
On the positive side, Quarter-End Window Dressing (discussed in our publication and previous blogs), is approaching over the next week. Funds managers often re-balance their portfolios near the end of each quarter, adding capital to strong stocks. Together with the extreme levels of the Fear & Greed Index, it could provide a market bounce.
Astrologically, as noted for the past several weeks, the planet Mars continues its aggressive energies in the sign of Cancer (until April), symbolizing the “protection of the home,” which has continued to be evident by the new administration’s determination to secure and protect the country over the past month and a half. Defensive stocks (including cybersecurity companies), insurance, and energy have been leading the market in recent weeks.
As we ended Pisces season (symbolizing confusion, delusion, and theatrical Pisces energies - please review our Sign Language – Pisces blog, dated 2-5-25) on March 20, the volatility continued with the uncertainty of global financial conditions, including tariff talk. Aries season is now upon us (from March 21 – April 19), when fiery, determined, action-taking energies emerge.
As discussed, the current Venus Retrograde (which began March 1), true to form, resulted in a strong market pullback (please review our recent Planet Power - Venus Retrograde blog, dated 2-17-25, for more details). Venus remains in the sign of Aries (ruled by Mars), until March 29, when it briefly returns to Pisces. During the back-and-forth sign transits by Venus, the market volatility is expected to continue. As also noted, the planet Mercury is in retrograde in the sign of Aries (until April 7), and will remain in that sign until the last week of May. Mercury retrograde often results in added confusion and/or multiple price reversals (which has again occurred), signifying mixed communications. As both planets continue to move back and forth between Pisces and Aries, it is likely to jumble the energies of both signs, further distorting the clarity of the markets. Mercury and Venus were conjunct on March 9, and the very next day (Monday, March 10), saw a huge market drop of 155 points on the S&P. They will again conjunct this coming Friday, March 28. Expect more tumultuous price action with this active sky, together with all the personal planets’ changes of direction and signs.
Aries “season” is often associated with fast beginnings, that quickly fade, so continue to be aware of potential “false breakouts,” and short-term rally reversals. Venus will then turn direct on April 13, and again returns to Aries from April 16 to June 6, strengthening its energies going forward.
The planet Neptune also transits into the sign of Aries next weekend, which we discussed fully in this week’s Planet Power – Neptune in Aries blog, dated 3-17-25. This will occur at the same time as the next Solar Eclipse, which coincides with new beginnings (Aries and New Moon energies). Reducing share size on holdings and/or trades continues to be a consideration for those with a shorter-term investment time frame. Be especially cautious of “false breakouts” during this activity, as trading is more difficult.
Look for sectors including defense, pharmaceutical, insurance, communications, technology, gold/silver, and cryptocurrencies to continue to be in focus, again with likely continued volatility. For sustained rally’s, it is usually important for financials and technology to remain strong. In the longer term, certain subsectors 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 upward climb again this week, until Friday, as the dollar remained weak, after recently pulling back from all-time highs. Mars’ transit through Cancer, which resulted in gains on the previous occasion (from early September to early November of 2024), continues through early April. As we have expressed in recent months, any pullback in these metals will likely be short-lived (as long as the dollar remains weak) and they continue to be long-term buying opportunities on any declines. The Gold to Silver Ratio (covered in our publication) rose this week, as silver lagged, from 88.3 to 91.5, indicating silver may currently be a better value 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.
