FEAR & GREED INDEX 75
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 75, as of the close on Friday, October 18, 2024.
This figure remained at the edge of the Greed/Extreme Greed category this week, up 1 point from last Friday’s close of 74. The S&P 500, rose 49 points from 5,815 to 5,864, in a very positive week. For the 3rd straight week, the Dow Jones Industrial Average and S&P 500 registered All-Time Highs during the week, while the Nasdaq continues to approach the same. As noted last week, moves into the Extreme Greed level would suggest at least a potential short-term pullback. Right on cue, after the reading crossed into Extreme Greed on Monday, the S&P 500 dropped temporarily on Tuesday, sliding back into the Greed level, which created a quick trade opportunity. It did not last long, however, as strong days on Thursday and Friday brought the reading back to 75, 1 point into Extreme Greed.
The “Risk-On” sentiment continued this week as well, inspired by continued negative economic reports remained negative to flat, continuing the expectation of near future rate cuts. The Bond market 10-year yields ended just under 4.1%, exceeding 4% for the 2nd straight week, further assisting the equity market gains. Bond funds, including TLT, continued their unusual movement, rising mid-week, but descending again by weeks end. Further cuts would suggest a rise in these bond equities.
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) = 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) = GREED
Stock Price Breadth (# of shares rising vs falling on NYSE) = EXTREME GREED
Safe-Haven Demand (which measures stocks vs bonds) = EXTREME GREED
Junk Bond Demand (non-govt. bond yield spread) = GREED
Only 3 of the 7 factors changed levels this week, led by the Put to Call Ratio, which moved from Greed to Extreme Greed, suggesting a pullback may be in order. All others continued the theme from last week, exuding greed levels across the board. Be careful for extended conditions with many stocks, where RSI (Relative Strength) levels have reached 85-90.
The VIX, measured by Market Volatility, remained in Neutral territory, dropping back to 18, after closing last week at 20.5. The drop remained positive for stocks, as lower volatility normally does. Positive earnings for some key technology companies helped assist the continuing rally. The 7 indicators remained in sync with each other for the 4th straight week, which has created overall positive market conditions.
Astrologically, the disruptive planet Uranus’ Retrograde (in the sign of Taurus), continues until January 25, 2025, affecting the technology sectors. Since the violent sudden trend reversals experienced right at the beginning of the retrograde period in early September, additional smaller tech trend reversals have also occurred, though the major reversal uptrend continues. The Mars in Cancer energies also continue, signifying aggression, and protecting the homeland. Keep in mind that Cancer is the Ascendant/1st house of the United States Stock Market (USSM), where Mars energies are currently prominent.
As we often note, the planets Mercury and Venus’ tend to have shorter-term effects on the markets. Mercury has now transited into the sign of Scorpio (October 13), changing the landscape from calmer markets to more intense energies. As Scorpio season, a typically strong market period, begins in the next few days, look for the communications, financials, and defense sectors to be strong (please see our Sign Language – Scorpio blog, dated 10-4-24). We also mentioned last week that Mercury and the Sun would also form a square aspect (challenging) together with Pluto around this time, suggesting “hidden truths” coming to light, though the deception will continue.
The planet Venus (money) also changed signs this weekend, entering the sign of Sagittarius on Friday, October 18, remaining until November 11, which is also favorable for the markets. This placement of Venus tends to be more fun-loving, adventurous, ambitious, and less intense, coinciding with a traditionally strong month of November. One should stay cautious, however, with the uncertainty of the Presidential election, and the potential aftershocks that could follow.
Pluto will now spend its last month in Capricorn (the government) as it slowly progresses toward Aquarius (the people), entering on November 20 (remaining for about 20 years), after the U.S. Presidential election. There may be chaos and intensity throughout the country, and the globe, in reaction to the election results, which would again incite volatile markets. The U.S. equity markets have stayed afloat to date, despite the uncertainty, with Pluto’s last stand in Capricorn, though change may be on the horizon. Looking back to our Planet Power – Neptune blog, dated 6-9-24, we find that the perception and reality regarding interest rates, debt, and the bond market, seems to remain an “illusion,” or “delusion” regarding the true state of the global economy. It may take until after the U.S. Presidential election for the dust to start to settle.
For non-day traders, looking for longer-term value may serve better than simple trend following during this transit, as trends may be inconsistent. For shorter-term traders, continue to be flexible, control your emotions (Mars in Cancer), and do not hold on too long to any position that is showing signs of reversal, as volatility is likely to ramp up.
The defense/military/homeland sector remains a focus with Mars in Cancer, as steady gains continue in leading cybersecurity stocks (defending the “home”), as discussed in previous blogs. Be cautionary with sectors including consumer discretionary (luxury), retail, and energy, as they fluctuate heavily during this time of year, based on holiday shopping (which may be lighter this year), weather, and “real” economic conditions. Should economic reports (and revisions) continue to be weak, sectors including consumer staples (necessities), real estate, and healthcare may resume their uptrend. Recession conditions will also hit the retail and luxury industries hard, in addition to the transports, airlines, and oil.
Gold (ruled by the Sun), and Silver (ruled by the Moon), picked up the pace again this week, as the perception of the falling dollar, hedging for a possible market collapse, and monetary policy shifts remain a focus, and continue to be buying opportunities on any pullbacks. Remember that the general premise is when the dollar falls (which normally occurs during rate cuts), 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 in a positive manner, 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.
