FEAR & GREED INDEX 56
The Fear & Greed Index (found on cnn.com) is one of the easiest indicators to use to determine current market emotion. The 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 56, as of the close on Friday, July 12, 2024.
This figure has moved just into the beginning of the “Greed” territory, up slightly about 2 points from last Friday’s close at 54, after a solid day on Friday, although there was “profit taking” in the last hour. This was supported by the increase of 48 points in the S&P 500, from 5,567 to 5,615, another all-time high. The gauge, continued its steady incline over the past few weeks, which is common at the beginning of July.
The “risk-off” approach with investors over the last few weeks waned a bit, as some economic reports (for the 2nd straight week) were released, increasing investor expectations of interest rate cuts before the end of the year. Financial companies opened “earnings season” (which occurs each quarter) this week as well, with mixed results. Bond yields also decreased slightly, about .1, down to just under the 4.2 range, suggesting a little more risk adverse sentiment. Volume was very light again this week (only about 2/3 the average volume), however, as popular summer vacation weeks continue. Remember that price action is not as strong, or confirmed, with lower than usual volume.
Advances in long time market leaders like Nvidia, Microsoft, Apple, Google, Tesla, and Amazon, etc… which had been pulling back off their recent highs of mid-June, basically continued once again, as the gains became more widespread than just those companies for the 2nd straight week, a good sign for current overall market conditions.
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. – EXTREME GREED
Market Volatility (measured by the VIX) = NEUTRAL
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) = EXTREME FEAR
Stock Price Breadth (number 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) = GREED
All these factors remained at the same level as last week.
Astrologically, Cancer “season” (when the Sun is positioned in the sign of Cancer from June 20 – July 21) is now in full effect. As mentioned in the last 2 week’s updates, the focus has centered around emotion, intuition, and protection (see our Sign Language – Cancer blog dated 6-8-24) in this sign. As the month of July has seen the 2nd best monthly returns over the past few decades, gains have continued, as expected, at a steady pace. The start of both 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) have passed, though they will not reverse for quite a few months, and their energies will continue to be a factor.
Leo season will begin on July 22 (through August 22), which will bring new energies, further discussed in our Sign Language – Leo blog, dated 7-10-24. The latter half of August and September is a traditionally weak period in the market, and the looming Mars-Jupiter conjunction and Jupiter-Saturn square in the 3rd week of August (discussed in an upcoming Trader Transits blog), may signal some volatility and a possible dip or correction.
Keep an eye on sectors including real estate and financials, as well as energy and Bitcoin, after yesterday’s events in Pennsylvania concerning our former president. We remain unpolitical on this site, however a perceived advantage from these events may affect these industries. 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 when contemplating investments of all types, which is challenging in the sign of Cancer. Last week’s Neptune retrograde arrival is another reminder not to get caught up in the fantasy and “illusions of grandeur” regarding the equity markets.
Silver (also ruled by the Moon), after rising last week was basically flat. One ETF which tracks silver, SLV, dropped slightly to close at $28.12, down about $0.50. Any healthy pullback may be a potential buying opportunity in silver.
Additionally, the Mars conjunct Uranus major transit is now on the doorstep (this Monday, July 15, 2024), and the energies have already begun to be felt in the markets, with wild swings on both Thursday (down) and Friday (up), with a late afternoon sell-off. As discussed in our Planet Power – Mars blog, dated 5-21-24, and our Trader Transits – Mars conjunct Uranus blog, dated 7-1-24, Mars symbolizes action and aggression, while Uranus signifies sudden, unexpected events, and technology. Ironically (or not), on Thursday and Friday, this conjunction coincided perfectly with the sudden downturn after the Consumer Price Index (CPI) and Producer Price Index (PPI) reports were higher than expected (Thursday), and the reversal upward after the jobless claims fell by 17k (Friday).
Finally, the U.S. market continues to be extended regarding its 4-year cycle (48 months). The lows of this cycle occurred in March of 2020, which is now almost 52 months ago. Historically, it is extremely rare for highs not to be realized by the 48/49-month mark. As noted, July, which still has 2 weeks remaining, is historically positive, but 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.
