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, January 24, 2025.
This figure has moved into the Neutral category, rising 11 points from last Friday’s close of 38, after recovering from Fear levels over the last several weeks. Once again, the correlated moves in the markets have supported the theory regarding this gauge. The S&P 500 rose 105 points from 5,996 to 6,101, closing a week over 6,100 for the first time, despite the pullback on Friday. The S&P 500 reached yet another All-Time High on Thursday, while the Dow Jones Industrial Average and Nasdaq closed in on the same.
The “Risk-On” sentiment continued this week through Thursday as conditions were suddenly perfectly balanced, as the dollar dropped, commodities rose, and the 10-year bond yields remained stable, closing the week even at 4.62%. The perception of possible rate cuts in 2025 remained, at least for the time being.
The 7 internal factors used to formulate this index are listed below:
Market Momentum – (S&P 500 vs its 125-day moving avg) = NEUTRAL
Market Volatility (measured by the VIX) = NEUTRAL
Put to Call Ratio 5-day avg. (# of Puts (bearish) vs Calls (bullish) = EXTREME GREED
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) = FEAR
Safe-Haven Demand (which measures stocks vs bonds) = FEAR
Junk Bond Demand (non-govt. bond yield spread) = GREED
This week, 4 of the 7 factors changed levels, with Market Momentum rising slightly for the 2nd straight week, this time from Fear to Neutral, consistent with the rise of the index itself. However, Stock Price Strength remained in the Extreme Fear level, while Stock Price Breadth inched up to the Fear level, continuing to indicate only a slight improvement to the low number of stocks participating in the recent rally. Safe-Haven Demand also slid back to Fear from Greed, as commodities generally rose, coinciding with the weakness in the U.S. dollar and the steady bond yields. As mentioned for several weeks, the signs of continued weak underlying conditions indicates that we need to be very selective with stock choice.
The VIX, measured by Market Volatility, steadily decreased throughout the week, settling in at 14.8, from 16, by weeks end, technically remaining in Neutral territory, symbolizing the increase in market sentiment.
The previously mentioned January Effect is now in full effect, and the S&P now finds itself slightly positive with one week remaining in the month. It would be theoretically positive for the markets if this continues through January 31.
This week’s news included events from the first few days of the new term of the elected President in the United States. Executive orders, a publicized conference with 3 major contributors to AI technology, and a teleconference with World Economic Forum (WEF) leaders in Davos, all had major effects on stocks in industries including solar and energy (to the downside), as well as AI and defense/security to the upside. There is certainly more to come, so expect heightened volatility in general. Home sales and consumer confidence also plunged last month, which will be further reviewed in next week’s monthly Indicator Insights blog.
Astrologically, these were true Pluto in Aquarius themes, as we have discussed in our previous Trader Transit, Planet Power, and weekly blogs. The recently discussed Uranus and Mars planetary retrograde energies remain in effect, though Uranus will finally turn direct this coming Thursday, January 30, and slowly make its way to its transit into the sign of Gemini mid-year. As noted last week, Mars has now moved back into the sign of Cancer, repeating some recently felt energies regarding the protection of the home. The suddenly aggressive determination to secure and protect the “home” is evident by the new administration. Mars 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 also continued to be uncovered (related to Neptune and Saturn in Pisces), which is now joined by Venus.
Aquarius “season” (with the Sun in that sign), which lasts until February 18 is now in full effect. As noted, the sign of Aquarius signifies a “freer and liberating” type of energy, although February is historically the 2nd weakest month for equities. Please see our Sign Language – Aquarius blog, dated 1-7-25, for more details.
The planet Venus (money), remains in the sign of Pisces until February 4, emitting a positive “vibe,” but also some confusion, illusions of grandeur, and idealism, suggesting more uncertainty in the markets. Look for more possible reversals and volatility in the short term as a result, despite the overall positive sentiment. There is also a Venus retrograde approaching, beginning on March 1st, and remaining until April 12, which often results in market pullbacks. During this time frame Venus will move back and forth between Aries and Pisces until early June. We will discuss this in an upcoming blog in the next few weeks.
The planet Mercury, which has transited through the sign of Capricorn (ruled by Saturn) since January 8, will also enter the sign of Aquarius tomorrow, Monday, January 27, and remain until February 22. Mercury’s short conjunction with Pluto, will certainly spark much controversy and outspoken arguments regarding the transformation in the U.S.
Look for sectors such as financials, defense, communications, technology, gold/silver, and cryptocurrencies to continue to be in focus, again with some volatility. 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 (Pluto in Aquarius, and Uranus ingress Gemini mid-2025), as was evident this week.
Gold (ruled by the Sun), and Silver (ruled by the Moon), rose again this week, as treasury yields and the U.S. Dollar declined, in-line with the “Risk-On” sentiment rising. Also, the recent Mars transit through Cancer (from early September to early November), resulted in gains in gold, which is now Mars’ position again through early April. As we have noted 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. The Gold to Silver ratio (covered in our publication) reached 90 earlier in the week, indicating silver may currently be a slightly 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.
