FEAR & GREED INDEX 27
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 27 as of the close on Friday, January 10, 2025.
This figure slid back to the lower-Fear level, bordering Extreme Fear, while ultimately falling 5 points from last Friday’s close of 32, while the S&P 500 lost 115 points from 5,942 to 5,827, in another shortened week of trading on Wall Street. The S&P 500, Nasdaq and Dow Jones Industrial Average experienced more gyrations, accelerating their current downtrends from mid-December peaks.
The “Risk-Off” sentiment returned for the time being with all the mixed reports, including the “strong” jobs report at the end of the week. The 10-year bond yields remained high, rising to 4.76%, from 4.6%, as bonds continued to falter, which is not favorable for stocks. The FOMC meeting again produced contradictory remarks regarding future rate policy, lowering their “expectation” of rate cuts. These comments continue to remain consistently unclear and confusing, and are not representative of the real current economic conditions. It begs the question “why cut rates .75 over a 10-week end of year period (when inflation was NOT under control),” then reverse course so soon. As we have noted for several weeks, Fed rate cuts generally result in an increase in bond prices, not the decrease we have recently experienced, which suggest the market is not buying what the Fed is selling.
The 7 internal factors used to formulate this index are listed 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) = 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, 3 of the 7 factors changed levels, with the Put to Call Ratio slipping back to the Fear level as bearish sentiment increased, after leveling off last week. Stock Price Strength and Stock Price Breadth remain in the Extreme Fear level, and were joined by Market Momentum this week, as the momentum finally succumbed to less stocks contributing to the recent market rise. Safe-Haven Demand also slipped from Fear to Extreme Fear, as commodities rose with the increased negative sentiment in most stocks and bonds. As mentioned, the signs of weak overall conditions indicates that we need to continue to be very selective with stock choice.
The VIX, measured by Market Volatility, rose to 19.5, from 16.1, by weeks end, technically remaining in Neutral territory, though the increase signifies rising current uncertainty and nervousness regarding the equity markets.
This week’s news again included more negative economic readings, including further increases in consumer/purchaser prices and job loss, further putting into question and the false perception of the underlying “strength of the economy.” The struggle continues with record high credit card debt, defaults, and the cost of living, The initial Quarter re-balancing (where funds adjust each holding’s percentage/weight of the total account) and funds adding new money to strong performing stocks appears to be over as well. The “strong” jobs report at the end of the week (though November’s report was revised DOWN – of course) upset the markets as the perception of less rate cuts surfaced once again. Earnings season will begin again next week, which should provide some better direction.
Astrologically, the recently discussed Uranus and Mars planetary energies remain in effect, with the technology sector continuing its aggressive/sudden changes of price direction, again on display this week. Mars has now moved back into the sign of Cancer, repeating some recently felt energies regarding the protection of the home. The planet will finally end its retrograde in the 3rd week of February, but remain in Cancer until early April. The threat of global conflict continues under this aspect, as we have discussed in recent blogs. Many “hidden truths” and “deceptive practices” have continued to be uncovered (related to Neptune and Saturn in Pisces), which is now joined by Venus.
Capricorn “season” (with the Sun in that sign), continues for approximately one more week, until January 20, but these retrograde energies continue to wreak havoc.
The planet Venus (money), entered the sign of Pisces on Friday, January 3, emitting a positive “vibe,” and right on cue the markets rallied heavily. This sign does represent more confusion, illusions of grandeur, and idealism, however, suggesting more uncertainty in the markets. Look for more possible reversals and volatility in the short term as a result. The planet Mercury also entered the sign of Capricorn on Wednesday, January 8. Capricorn is ruled by Saturn, which is more restrictive, and will partially “ground” the Venus in Pisces “illusions of grandeur,” further supporting the expected continuation of non-direction price action.
Look for sectors such as Consumer discretionary, financials, defense, communications, technology, gold/silver, and cryptocurrencies to continue to be in focus, again with heightened volatility. In the longer term, certain subsectors of the technology industry are likely to advance into the future as well, including AI, robotics, quantum computing, and space development (Pluto in Aquarius, and Uranus ingress Gemini mid-2025). Also, the airlines/travel/retail sectors have shown recent strength, but could be affected by a further increase in oil prices, the end of holiday travel, and/or holiday spending comes in lower than expected.
Gold (ruled by the Sun), and Silver (ruled by the Moon), rallied a bit this week, along with Crude Oil and the U.S. Dollar, in-line with the “Risk-Off” sentiment rising. Also, the recent Mars transit through Cancer (from early September to early November), resulted in gains in gold, which will again be Mars position through early April, as noted above. As we have mentioned on several occasions recently, any decline in metals will more than likely be short-lived (as the dollar strength may be temporary) and continue to be long-term buying opportunities on any pullbacks.
***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.
