FEAR & GREED INDEX 51
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 51, as of the close on Friday, November 15, 2024.
This figure now sits at the Neutral level, falling from Greed, after a volatile end of the week. The gauge fell 10 points from last Friday’s close of 61, while the S&P 500 declined 125 points from 5,995 to 5,870, after briefly touching 6,000 (for the first time ever) last Friday. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all reached All-Time Highs once again, at the beginning of the week, before the later week pullback.
Consistent with these readings, the “Risk-On” post-election euphoric sentiment cooled down for the time being. 10-year bond yields, now at 4.45%, continue to rise, which is a growing concern as Fed rate cuts generally result in an increase in bond prices, not a decrease.
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) = 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) = EXTREME FEAR
Safe-Haven Demand (which measures stocks vs bonds) = GREED
Junk Bond Demand (non-govt. bond yield spread) = EXTREME GREED
Four of the 7 factors changed levels this week, led by Market Momentum, which slipped back to Neutral from Extreme Greed, after the late week decline. Both Stock Price Strength, and Breadth, slipped from Fear to Extreme Fear, as the market appeared to top, at least for the short -term, on Wednesday. This is not surprising as the euphoria following the Presidential election started to fade. The Put to Call Ratio ticked up to Greed, from Neutral, though technically it moved down 1/10th of a point, from 0.7 to 0.69. A further move into Greed may suggest a coming rally, as this factor is forward looking. Overall, the 7 indicators became a little less disjointed this week, with more negative readings as a result of the paused rally.
Although the VIX, measured by Market Volatility, remains in Neutral territory, as it rose a bit from 14.9, to a close of 16.1. This was reflected by the late week negative price action the last 2 days of the week. This appears to be a normal pullback, or at least a “pause” in market gains, especially after the large post-election move to the upside. Historically, we have also entered the stronger months of the year for the markets, as we have noted in previous blogs and our publication. Keep an eye on bond market action, however, as it has not been in lock-step with the recent Fed rate cut actions.
Weekly news also included continued reports of rising inflation, lower manufacturing, and continued mass layoffs from airlines and auto makers. Bonds continued to fall, and Fed Chairman Powell made some confusing remarks, once again, regarding inflation, despite what the numbers portray. Suddenly, the reports of a “strong” economy may result in no further immediate rate cuts, despite the surprising 50 basis-point rate cut just 1 and a half months ago. It is hard to understand how that move was not politically motivated, since the struggling economy has not changed judging by the “real” numbers.
Astrologically, the recently discussed Uranus and Mars planetary energies remain in effect, with the technology sector continuing its aggressive/sudden changes of direction as earnings season continues. The most important earnings report of all, Nvidia, will occur this coming Thursday, November 20, which is likely to move markets, as it always does.
The planet Venus (money) moved out of the sign of Sagittarius (optimism and ambition) and into the sign of Capricorn (restrictive and cautious) earlier this week. The planet Saturn, which rules Capricorn, has also turned direct (from retrograde), which further suggests possible restricted gains in the short-term.
The planet Mercury’s transit through the sign of Sagittarius continues, until January 9, 2025, an unusually long time, due to its retrograde period beginning on Monday, November 25. Mercury retrograde, as we have discussed in many recent blogs and our publication, normally wreaks havoc on the market with raised volatility and no clear or consistent price direction - so beware and watch your trading stops-loss levels. Mercury will then go “direct” on December 15, in time for the expected annual Santa Claus rally (also discussed in our publication) later in the month. A Mars retrograde also begins on December 6, which will likely increase volatility.
A current Full Moon in Taurus (money) conjunct Uranus (technology) also coincided with yet another sudden reversal (downward) in technology stocks on Friday. Short-term traders should exercise extreme caution, while long-term traders will most likely be unaffected as certain subsectors of the technology industry should advance into the future, including AI and space development (Pluto entering Aquarius). Also, continue to look for the communications, financials, and defense sectors to be strong. The airlines/travel/retail sectors have shown recent strength, but could be affected if oil rises, or holiday spending is lower than expected.
Gold (ruled by the Sun), and Silver (ruled by the Moon), again pulled this week after the election, as the financial sector gained based on the strengthening dollar, and the surge in Bitcoin. The president-elect had a lot to do with this move, as he has made many promises favoring cryptocurrencies. This 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.
