FEAR & GREED INDEX 68
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 68, as of the close on Friday, September 27, 2024.
This figure moved slightly higher into the Greed level since the end of last week, increasing 5 points from last Friday’s close at 63 (although it reached 72 on Thursday), a move of slightly less than 8%. This was supported by an increase of 36 points in the S&P 500, from 5,702 to 5,738, from the beginning of the week to the end. The Dow Jones Industrial Average and S&P 500 hit all-time highs once again, although the Nasdaq remains well below, as fragmented/divergent market conditions returned.
This week’s price action appeared to be a result of last week’s Federal Reserve decision to cut interest rates by ½ a percentage point (to the surprise, and confusion, of many). Despite several months of negative economic readings (some revised further down), the narrative that the economy and jobs markets are strong, and inflation is down, is highly suspect. This makes the decision to cut rates that much stranger, as it normally leads to increased inflation. The massive number of recent job-layoffs, many by large companies, also continued this week, as the Fed Chairman’s repeated claim that their decisions are “data driven” doesn’t seem to make sense.
China’s announcement that they were going to “assist” their markets with further cuts (inflationary), the opposite of their policy for years of raising rates (deflationary) boosted their markets on Wednesday, and the U.S. markets responded with a sudden rally, as “Risk-On” took center stage once again. The markets continued to show some confusion, however, as the Bond market 10-year yields ended up about even at 3.75%, remaining below 4% for the 7th straight week. Bond funds, including TLT, strangely continued to fall through the week (the opposite of what would be expected with a large rate cut, until a slight reversal Thursday and Friday.
The 7 internal factors regarding this index, noted in previous updates, are listed below:
Market Momentum – (S&P 500 vs its 125-day moving avg) = 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) = EXTREME GREED
Stock Price Breadth (# of shares rising vs falling on NYSE) = EXTREME GREED
Safe-Haven Demand (which measures stocks vs bonds) = FEAR
Junk Bond Demand (non-govt. bond yield spread) = FEAR
Only three of the seven factors changed levels this week, led by the Put to Call Ratio, which edge up again, from Neutral to Greed, and now sits at 0.66, decreasing the number of open Puts (negative) vs Calls (positive) in the options markets for the 2nd straight week, a slightly bullish sign. Safe-Haven and Junk Bond demand both dropped to Fear, consistent with the continued upswing in gold and silver.
The VIX, measured by Market Volatility, remains in Neutral territory, although it spiked to 17 on Friday, after last week’s close of 16.5. The indicator remains a bit above normal, despite the advance in the S&P and Dow Jones. The 7 indicators continued to be more in sync with each other, for the 2nd straight week, suggesting continued calmer overall market conditions.
Astrologically, as noted the last few weeks, the Uranus Retrograde, which began on Tuesday, September 3 (and lasts until January 30, 2025), and immediately resulted in a violent, sudden, trend reversal in technology stocks, continues as is typical of Uranus (the “disruptor”), which represents the tech sector. This was again evident mid-week, as with sudden reversal’s (Uranus) in the Nasdaq occurred on both Tuesday and Thursday, although Thursday’s gains were mostly attributed to Micron’s positive earnings and future outlook.
The planets Mercury and Venus’ energies have coincided with the jittery sentiment over the last couple of months, as we have discussed in several previous blogs. Mercury just completed its stay in Virgo, one of its “home” signs, and has now entered the sign of Libra, as of Friday, the 27th, remaining until October 13. The volatility that came with the Virgo transit, may subside somewhat with Libra’s balancing and more consistent nature, however, may be overshadowed with the continued Uranus retrograde in Taurus, and Mars in Cancer energies. Keep in mind that Cancer is the Ascendant/1st house of the United States Stock Market (USSM), and Mars energies are prominent.
Venus (money) energies also remain in effect, as it has settled into the sign of Scorpio (September 23 - October 17). As noted last week, Scorpio is positioned in the 8th house of the zodiac, a key financial house representing assets, taxes, shared funds/other people’s money, debt, interest rates, taxes, and even death. Scorpio energies including privacy, possessiveness, loyalty, and intensity, do not always blend well with Venus’ energies, which are normally quite the opposite. For non-day traders, looking for longer-term value may serve better than just following trends during this transit, as they may be inconsistent. Be flexible, and don’t hold on too long to any position that is showings signs of reversal.
We are now in Libra “season” (September 23 - October 22, please see our Sign Language – Libra blog, dated 8-8-24), which has brought some balance and calmness to the markets. However, the market has fallen prey to government interference (Fed), signified by Pluto’s retrograde in Capricorn, before going direct on October 11, and into Aquarius (the people) on November 20, after the U.S. Presidential election. Combined with some inaccurate economic reports, the markets have stayed afloat despite the uncertainty.
As we have been noting each week since early August, we are in the weakest historical seasonal period in the markets, as September is traditionally the worst performing month of the year. As expected, several trend changes have occurred through the Mercury, Uranus, and Pluto retrogrades, the latter two which are still in effect. Last week’s lunar eclipse in Pisces on Tuesday evening into Wednesday also affected markets, on the same date as the mysterious (Pisces) 50 basis point rate cut occurred. This coming week we will experience a Solar Eclipse in Libra on Wednesday, Oct 2nd, which also has powerful energies that could affect equity markets. This September appears to be bucking the tradition, however, with some later month gains due to many of the above factors.
The defense/military/homeland sector remains a focus during this time frame. Mars in Cancer has just recently coincided with a sharp rise in leading cybersecurity stocks (defending the “home”), as discussed in previous blogs. The recent decline in other sectors, including consumer discretionary (luxury), retail, and energy, saw a slight reversal in the second half of the past week, but may not last. Continue to keep an eye on sectors including consumer staples (necessities), defense, real estate, and healthcare (on the upside), should economic reports (and revisions) continue to be weak. Recession conditions will also hit those sectors hard, in addition to the transportation industry, including airlines, oil, and transports.
Gold (ruled by the Sun), and Silver (ruled by the Moon), continued to surge upward again this week, based on the rate cuts, the falling dollar, and position hedging, and continue to remain buying opportunities on any pullbacks. Remember that the general premise is when the dollar falls, commodities will rise, especially these metals, as they are considered a “safe haven.” Also remember that ETFs which track gold (such as GLD), and silver (such as SLV) can be used to trade the market, as an alternative to holding the physical metal. Cryptocurrencies have also become active again during Venus’ transit through Libra (noted in our Sign Language-Libra blog), and has continued through the current Libra “season.”
***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.
