FEAR & GREED INDEX 4
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 4 as of the close on Friday, April 4, 2025, its lowest closing in 5 years (during the pandemic), and one of its lowest levels in history.
This figure is embedded deep in the Extreme Fear level, declining 18 points from last weeks close of 22. 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, but has struggled over the past month at varying points of this level. During the week, the S&P 500 plunged about 507 points from 5,581 to 5,074, a 9.1% move, after Thursday and Friday’s freefalls (the largest 2-day decline in history). Currently, the four major indexes; The S&P 500, Nasdaq, Dow Jones Industrial, and Russell 2000 (small cap index) moved further into bear market territory as over 50% of the companies they contain continue to trade under their 50, 100, and 200-day moving averages.
The “Risk-Off” sentiment returned with a vengeance this week after the global tariff announcements after the close on Wednesday, easily erasing the small bounce that preceded it. Although some bargain hunters had begun to nibble at leading stocks early in the week, the industry wide selloff began on Wednesday evening after the tariff news, tabbed as “Liberation Day.” 10-year bonds dipped below 4% for the first time since early October, but settled in right at 4%, after beginning the week at 4.25%. The current “risk-off” strategy continues to be a sell and hold cash approach, with a slight increase in the “flight-to-quality” approach of selling stocks to buying bonds, as Consumer Confidence and Sentiment remained at record lows.
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) = EXTREME FEAR
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) = EXTREME FEAR
This week, 2 of the 7 factors changed levels, and all 7 of the 7 now sit in the Extreme Fear category. As we have warned for several weeks, stock selection remains the key with continued weak underlying conditions. The only two remaining above Extreme Fear, the Vix and Junk Bond Demand (which are not government sponsored) last week, finally fell victim to the volatility and sell-off.
The VIX itself, measured by Market Volatility, doubled, as it spiked 21.9 points, ending the week at 43.6, from 21.7, surpassing 46 at one point. This high reading, combined with the ultra-low reading on the Fear & Greed Index, suggest the bottom is probably near, though that does not guarantee a timeline for a recovery, or what type it will be (see our Financial Focus – The Recovery blog, dated 4/1/25). The tariff “deadline” on Wednesday resulted in the massive spike in the VIX due to recession and global “trade war” implications. Also, the number of equities making 90-day lows surged to over 1,000 after Thursday’s close, while 90-day highs continued to remain very low all week.
The big news this week, of course, was the after the close tariff announcements by the U.S. President on Wednesday afternoon. The immediate aftershock rumbled through equity markets, dropping indexes 5-6% on both Thursday and Friday. The wild sell-off supports our theory that emotion is the main driving factor of short-term market moves, as companies basically unaffected by tariffs were also hit hard. Keep in mind that auto-trading algorithms also kick in around important price levels, and all the major indexes are near or below their 200-day moving averages. Additionally, on average, only 19% of all stocks contained within the 4 major indexes are trading over their 200-day moving averages.
A few weeks ago, we mentioned that, historically, after 14 or more days trading under the 8-day Exponential Moving Average (EMA), any retrace in the S&P 500 to that level does not result in a price reversal (which did occur) 95% of the time. We warned Contrarians and “bargain hunters” that any bullish price action may be temporary, and to proceed with caution.
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 consistently leading the market in recent weeks.
Aries season (March 21 – April 19), symbolizing fiery, determined, action-taking energies, continues with the expected volatility amid the uncertainty regarding global financial conditions, and the tariff situation. Please review our Sign Language – Aries Season blog, dated 3-8-25 for more details.
As discussed, the current Venus Retrograde (March 1 – April 12), which is mercifully nearing its end, immediately resulted in a strong market pullback again (please review our recent Planet Power - Venus Retrograde blog, dated 2-17-25, for more details). Venus has returned to the sign of Pisces for a brief time during its retrograde, bringing back some Piscean energies of confusion. As also discussed, the previous Venus Retrograde, in late July of 2023, resulted in an end to a rally, and ultimate drop of almost 400 points on the S&P, that lasted to the end of October. This retrograde, which has already resulted in a close to 900 point drop, will come to an end next weekend, though the energies (referred to as a “shadow” period) can drag on for awhile longer.
As also noted, the planet Mercury is in retrograde in the sign of Aries (for a few more days), and will remain in Aries until the last week of May. Mercury retrograde has again resulted in multiple price reversals, as it signifies 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 major market drop of 155 points on the S&P. They were conjunct again on Friday, March 28, when the S&P experienced another huge decline of 112 points. Expect more tumultuous price action for the time being, with this active sky combined with all the personal planets’ changes of direction and signs.
As noted, Aries “season” is often associated with fast beginnings, that quickly fade (which already occurred in the first week), so continue to be aware of potential “false breakouts,” and short-term rally reversals. During the back-and-forth sign transits by Venus, the market volatility is expected to continue. Venus will turn direct on April 13, and returns to Aries a few days later, remaining in the sign until June 6, strengthening its energies going forward.
The planet Neptune also transited into the sign of Aries last weekend, which we discussed fully in last week’s Planet Power – Neptune in Aries blog, dated 3-19-25. It occurred at the same time as the Solar Eclipse in Aries, coinciding with new beginnings (Aries and New Moon), and appeared to have rocked the markets on the last trading day prior to this event, with renewed fears of inflation (Neptune). We have been promoting that 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.
Leading sectors continued to include defense, energy, pharmaceutical, insurance, and gold/silver, until the major downturn beginning on Wednesday night. For a sustained rally, it is usually important for financials and technology to recover, and lead the way. 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 the tariff announcement brought them down with the ship. Uncertain economic conditions and recession fears in the short term could pause the gains. Mars’ transit through Cancer, which resulted in gains on the previous occasion (from early September to early November of 2024), continues through April 18. As we have expressed in recent months, any pullback in these metals has been short-lived, and they continue to be long-term buying opportunities on any declines. The Gold to Silver Ratio (covered in our publication) surged to 102.6 this week, after closing at 90.5 last week, following a sizeable drop on Thursday and Friday, and indicating silver may currently be an increasingly 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.
