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 22, 2024.
This figure now sits slightly into the Greed level, up 10 points from mid-Neutral, after a late week rally. The gauge rose 10 points from last Friday’s close of 51, while the S&P 500 rose about 100 points from 5,869 to 5,969, again approaching its recent breach of 6,000 (for the first time ever). The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all rose again by week’s end, all threatening to break All-Time Highs.
Consistent with these readings, the “Risk-On” post-election euphoric sentiment cooled down early in the week, as expected, with some profit-taking, then resumed by weeks end. The stubborn 10-year bond yields, now at 4.41%, remained steady, and suddenly there is growing skepticism regarding another Fed rate cut at next month’s meeting. As we have noted for several weeks, 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) = EXTREME GREED
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) = 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
Three of the 7 factors changed levels this week, once again led by Market Momentum, which resumed its Extreme Greed sentiment (after a 1-week slip to Neutral) reflected by the late week market rally. However, Stock Price Strength which rose slightly to Fear, from Extreme Fear, and Stock Price Breadth, which remained at Extreme Fear, suggests that the late week positive movement was not as broadly spread across all equities. The Put to Call Ratio also ticked up, to Extreme Greed, from Greed throughout the week, suggesting a possible near-term pullback, as this factor is forward looking. Overall, the 7 indicators are somewhat in sync, though the strength and breadth readings may suggest equity gains are narrower.
Although the VIX, measured by Market Volatility, spiked early in the week, it continues to remain in Neutral territory, as it dropped almost a point from 16.1, to a close of 15.2. This was also reflected by the late week price incline over the last 2 days of the week. Beware any market divergence in the short-term, with the above stated concern with the number of stocks advancing vs declining. Historically, we have also entered the stronger months of the year for the markets, as we have noted in previous blogs and our publication. Continue to 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 mass layoffs from airlines and auto makers. Bonds continued to fall, and major chip company, Nvidia, again reported blow-out earnings and a positive outlook, for the 21st time in the last 22 quarters. Oddly, this report did not cause a surge in stock price (as it normally does), as the price rose into the earnings report, but declined about 4% after. Again, this is most likely due to profit-taking in this high-flying chip maker.
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 comes close to an end. The much-anticipated transit of the planet Pluto into the sign of Aquarius (lasting for about 20 years), finally occurred, on Thursday, November 20, which suggests sustained transformational change (please see previous Planet Power blogs).
This all happens just in time for the next Mercury retrograde, which begins tomorrow, Monday, November 25, and lasts until December 15, as it transit through the sign of Sagittarius continues (through January 9, 2025). Mercury retrograde (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 stop-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. Sagittarius “season” (with the Sun in that sign) normally results in favorable market price action, as optimism rules during the holidays. Do you believe more in Santa, or Sagittarius? Last time Mercury went retrograde, a major reversal occurred on Day 1, August 5, 2024. This does not always occur of course, but bears watching as volatility is always likely and market sentiment remains high.
A Mars retrograde also begins on December 6, as well as a long Neptune retrograde ending December 9, which will likely further increase volatility this year. The ever-present threat of global conflict also lingers, related to Mars, so continue to be cautious and very selective with stock choice.
The planet Venus (money) remains in the sign of Capricorn (restrictive and cautious) while the planet Saturn, which rules Capricorn, recently turned direct (from retrograde), which further suggests possible restricted gains in the short-term.
Continue to look for the communications, financials, and defense sectors, and cryptocurrencies to be strong. Certain subsectors of the technology industry are likely to advance into the future as well, including AI and space development (Pluto in Aquarius). Also, 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 back this week, before a late week reversal. Post election, 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. As noted last week, the 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.
