FEAR & GREED INDEX 49
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 49, as of the close on Friday, July 19, 2024.
This figure has moved back into the “Neutral” territory, retreating about 7 points from last Friday’s close at 56, after a wild week on Wall Street. The gauge had moved into the “Greed” level, reaching 66 on Tuesday, but fell back significantly through the rest of the week. This move was supported by the S&P 500 decrease of 110 points, from 5,615 to 5,505, although the drop from the weekly high (intra-day and all-time high near the close on Tuesday) to the Friday close was technically 164 points, as volatility spiked and markets reversed.
The slightly “risk-off” approach returned with investors as expectations of interest rate cuts before the end of the year became a bit more uncertain. Financial companies continued “earnings season” this week (which occurs each quarter) with mixed results. Bond yields increased slightly, about .05, just above the 4.2 range, supporting the increasing change in sentiment. Volume was light once again, as popular summer vacation weeks continued, though slightly stronger than the previous two weeks. Remember that price action is not as strong, or confirmed, with lower than usual volume.
The 7 internal factors regarding this index, noted in previous updates, are listed below:
Market Momentum -- measures the S&P 500 vs its 125-day moving avg. – GREED Market Volatility (measured by the VIX) = EXTREME FEAR Put to Call Ratio 5-day avg. (number of Puts (bearish) vs Calls (bullish) = EXTREME GREED Stock Price Strength (number of new 52-week highs vs new 52-week lows) = FEAR Stock Price Breadth (number of shares rising vs falling on NYSE) = FEAR Safe-Haven Demand (which measures stocks vs bonds) = FEAR Junk Bond Demand (non-govt. bond yield spread) = EXTREME GREED
Many of these factors changed levels this week, due to the extreme volatility. Most notably, the VIX, measured by Market Volatility, spiked from Neutral to Extreme Fear in just a few days, increasing from the 13.1 close level last week to 16.5 by the end of Friday, a 26% change. Safe- haven demand also changed dramatically, from Greed to Fear, as the uncertainty and volatility favored bonds.
Astrologically, as mentioned in last week’s edition, the Mars conjunct Uranus major event (Monday, July15, 2024) wreaked havoc on the markets the last couple of days the prior to this aspect, and throughout this week, as expected. Sudden, unexpected disruptive events (Uranus), including the attempt on the former president’s life (Mars), the announcement of China chip restrictions, and the mysterious global internet outage. Please refer to our Planet Power – Mars blog, dated 5-21-24, and our Trader Transits – Mars conjunct Uranus blog, dated 7-1-24, for further information. Additionally, the Saturn retrograde (which began Saturday June 29 – see Planet Power-Saturn blog dated 6-1-24), and Neptune retrograde (which began Tuesday July 2 – see Planet Power-Neptune blog dated 6-9-24) continue their energies for the time being.
As Cancer season comes to an end over the weekend, and Leo season begins on Monday (July 22 through August 22), some new energies will emerge, further discussed in our Sign Language – Leo blog, dated 7-10-24. Remember that the latter half of August and September is a traditionally weak period in the market, and the looming Mars-Jupiter conjunction (August 14th) and Jupiter-Saturn square (August 19th), discussed in an upcoming Trader Transits blog, signifies some volatility and a possible dip or correction. Also, the next Mercury retrograde period will begin on Monday, August 5 (lasting through August 27), which always seem to highly affect the markets (see Planet Power – Mercury Retrograde blog, dated 4-1-24).
Continue to keep an eye on sectors including real estate and financials, as well as energy and Bitcoin/crypto, based on last week’s events in Pennsylvania concerning the former president. We remain unpolitical on our site, however a perceived advantage from these events may affect these industries. The two instances of apparent breakdown in security measures (as well as cybersecurity) at “home” was signified in the sign of Cancer and the movement of the Moon into the sign of Capricorn, opposing its home sign (Cancer). Capricorn is ruled by Saturn, which recently entered its retrograde period, also symbolizes government. Remember that this does not necessarily translate to new immediate investment opportunities, but are worth watching for trend recognition. As always, keep your emotions in check, and don’t be too attached (Cancer-emotion) or “proud” (Leo) of your positions if conditions have changed.
Commodities, including Gold (ruled by the Sun), and Silver (also ruled by the Moon), cooled at the end of the week, but remain in focus. One ETF which tracks gold, GLD, can be used to trade the market, as an alternative to holding the physical metal. As mentioned last week, one popular silver tracking ETF, is SLV. Any healthy pullback may be a potential buying opportunity in these, and other precious metals.
Finally, the recently mentioned U.S. market 4-year cycle (48 months), may finally be feeling some pressure. The lows of this cycle occurred in March of 2020, which is now almost 52 months old. Historically, it is extremely rare for highs not to be realized by the 48/49-month mark. Although July, which still has about 1 week remaining, is historically positive, proceed with caution!
***Full Disclosure: We currently hold a bullish position in SLV, since December of 2023.
***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.
