FEAR & GREED INDEX 61
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 61, as of the close on Friday, November 8, 2024.
This figure has now moved to the Greed level, rising from mid-Neutral, after massive gains following the U.S. Presidential election. The gauge rose 12 points from last Friday’s close of 49, while the S&P 500 increased 267 points from 5,728 to 5,995, briefly touching 6,000 (for the first time ever) on Friday. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all reached All-Time Highs once again, as the euphoria stretched across all U.S. markets.
The volatility and uncertainty leading into the U.S. Presidential election turned into full “Risk-On” sentiment with the perception of future market conditions, based on the results of the election. Adding to the frenzy was the expected .25% rate cut by the Federal Reserve, although bonds did not react very strongly, as 10-year yields remained stable at 4.35%. As recently noted, Fed rate cuts generally result in an increase in bond prices, which has not been the case.
The 7 internal factors used to formulate this index are listed below:
Market Momentum – (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. (# of Puts (bearish) vs Calls (bullish) = NEUTRAL
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
Despite the gains in the equity markets, only 2 of the 7 factors changed levels this week. Market Momentum surged to Extreme Greed, as you would expect, and the Put to Call Ratio dropped to Neutral. The latter is interesting as ATH’s in the markets are not correlating with expected future options call bias. This may suggest extended prices and a possible pullback, as profit taking would not be surprising in the short term. Overall, the 7 indicators are a bit disjointed, with more Fear readings than would be expected with the large rally.
Although the VIX, measured by Market Volatility, remains in Neutral territory, it dropped significantly from 21.9, to a close of 14.9. This is reflected by the positive price action the last 3 days of the week, but are reaching a level that normally corresponds with a pullback, or at least a “pause” in market gains. Historically, we have also entered the stronger months of the year for the markets, as we have noted in previous blogs and our publication.
Weekly news also included Nvidia replacing Intel in the Dow, as well as the end to the Boeing labor strike, which also helped boost stocks.
Astrologically, the Uranus effect (sudden change) kicked in once again following the election, with the spike in the technology and crypto sectors (which Uranus represents), which has occurred several times since its retrograde period began in early September (lasting until late January 2025). The tech sector remains very sensitive, with earnings season upon us, and several key companies reporting this coming week.
The planet Mars has now entered the sign of Leo (the rising sign of the new President-elect) for about 2 months, before retrograding back into Cancer. The Mars aggressive energies will continue, extending beyond just the Cancer “protective” theme, as conflict between leadership (Leo) continues. Keep in mind that Cancer is the Ascendant/1st house of the United States Stock Market (USSM), where Mars energies are currently prominent. Leo, signifies the 2nd house of the USSM (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 and United States Stock Market (USSM) blogs for further Pluto information.
The planet Mercury’s transit through the sign of Scorpio has ended, and it has now entered the sign of Sagittarius (where it is usually favorable). Scorpio season is also still in effect (through November 21), 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/travel/retail sectors have shown recent strength, but could be affected if oil rises, or holiday spending is lower than expected.
The planet Venus (money) has also settled into the sign of Sagittarius (fun-loving, adventurous, ambitious), since October 18 (typically favorable for the U.S. markets), suggesting “happy days are here again,” and will remain there through next week. Short-term traders should stay cautious, however, especially those who use tight stop-losses, as the noted pullbacks are likely to occur. Venus will then move into the sign of Capricorn, which is ruled by Saturn, on November 12, which may restrict gains for a while.
Gold (ruled by the Sun), and Silver (ruled by the Moon), pulled back a bit this week after the election, as the financial sector gained based on the strengthening dollar. This will more than likely be temporary (with more rate cuts expected) and these metals continue to be 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.
