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, November 1, 2024.
This figure has now dropped to the mid-Neutral level, after reaching Extreme Greed just two weeks ago. The gauge fell 10 points from last Friday’s close of 59, while the S&P 500 decreased 80 points from 5,808 to 5,728, in the past week.
The Dow Jones Industrial Average and S&P 500 have both pulled back from All-Time Highs two weeks ago, while the Nasdaq also retreated from its ATH last Friday. As noted last week, and in our publication, when price moves into the Extreme Greed level, it is common for at least a potential short-term pullback.
Leading into the U.S. Presidential election this coming Tuesday, the volatility continues as the market plunged on Thursday, signified by a “Flight to Quality” (“Risk-Off”) sentiment with money rotation into bonds, then reversed again on Friday to recover some of the losses. The market remains confused with continued mixed economic reports, including more downward jobs revisions, the expectation of near future rate cuts, and the funky Bond market action, as 10-year yields crept up to 4.39%, their highest since early July. Bond funds, including TLT, continued their strange downward trajectory, despite Fed rate cuts that generally creates an increase in bonds. Although further cuts would suggest a rise in these bond equities, caution is necessary until normal conditions return.
The 7 internal factors used to formulate this index are listed below:
Market Momentum – (S&P 500 vs its 125-day moving avg) = 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) = FEAR
Stock Price Breadth (# of shares rising vs falling on NYSE) = FEAR
Safe-Haven Demand (which measures stocks vs bonds) = GREED
Junk Bond Demand (non-govt. bond yield spread) = EXTREME GREED
Only 2 of the 7 factors changed levels this week, as Market Momentum and Stock Price Breadth both fell from Greed to Fear. These two sub-categories correlated with the overall gauge reading as the market cooled down.
Although the VIX, measured by Market Volatility, remains in Neutral territory, it did rise to 21.9, after closing last week at 20.3. A spike over 23 on Thursday pulled back after Friday’s relief rally. Earnings from some key technology companies were mixed, furthering the uncertain market direction in the latter half of the week. The 7 indicators started to become more in sync on the negative side this week, with the uncertain market conditions leading into the much-anticipated Presidential election in a few days. Historically, we are entering the strong months of the year for the markets, as we have noted in the past and explained in our publication.
Astrologically, as discussed in the last few weeks, the disruptive planet Uranus’ Retrograde (in the sign of Taurus), continues until January 25, 2025, affecting the technology sectors, which has been apparent since its outset in early September. The tech sector remains very sensitive, with earnings season upon us, with several trend reversals since the onset of the retrograde in early September. The planet Mars will now enter the sign of Leo, for about 2 months, before retrograding back into Cancer. The Mars aggressive energies will continue, extending beyond just the “protective” theme, as conflicts between global leaders continue. Keep in mind that Cancer is the Ascendant/1st house of the United States Stock Market (USSM), where Mars energies are currently prominent. Leo, signifying the 2nd house of the USSM, now includes a money theme as well. Aggressive monetary policy and questionable economic reports continue, however, Mars will also form an opposition to Pluto this weekend, uncovering more “hidden truths.” Please review last week’s Fear & Greed Index blog, and this weekend’s United States Stock Market (USSM) blog, for further Pluto information.
The planet Mercury’s transit through the sign of Scorpio has now ended, as of yesterday, November 2, and it has now entered the sign of Sagittarius (where it is not usually very favorable). Scorpio season is still in effect (since October 22), which is a typically strong market period. Continue to look for the communications, financials, and defense sectors to be strong (please see our Sign Language – Scorpio blog, dated 10-4-24). Mercury will remain in Sagittarius until January 9, 2025, an unusually long time, due to its retrograde period beginning at the end of November). The airlines sector, which have been strong recently due to low crude oil prices, could experience some turbulence, (pardon the pun), with Mercury (travel and communications) in this sign (the 9th house of the zodiac, also symbolizing travel), so beware of volatility and “overextended” conditions. Holiday travel and shopping, both interest rate sensitive, along with the retrograde, could highly effect directional trading in these industries.
The planet Venus (money) has also settled into the sign of Sagittarius (fun-loving, adventurous, ambitious), since October 18 (which is typically favorable for the U.S. markets), and will remain there until November 11, about 1 week after the presidential election. One should stay cautious, however, with the uncertainty of the election, and the potential reactions that will likely follow. Venus will also square Pluto early this week, which could continue the current pullback.
For non-day traders, looking for longer-term value may serve better than simple trend following during this transit, as trends may be inconsistent and non-directional. For shorter-term traders, continue to be flexible, control your emotions (Mars in Cancer), and do not hold on too long to any position that is showing signs of reversal, as volatility is likely to ramp up. Holding some cash may be beneficial to take advantage of any coming opportunities.
This week, beware the election, global economic decay, and global volatility.
Gold (ruled by the Sun), and Silver (ruled by the Moon), advanced again this week, as the perception of the falling dollar, hedging for a possible market collapse, and monetary policy shifts remain a focus, and continue to be buying opportunities on any pullbacks, as there are no signs of major reversal on the horizon.
***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.
