INDICATOR INSIGHTS

Monthly Update March 2025

CATEGORY                                                       

Market Sentiment/Risk                   MO. END   %/CHANGE    LEVEL

Fear & Greed Index (Market sentiment)          22                  +2              Extreme Fear

VIX (S&P 500 Volatility measure)                 21.7                +2.1            Neutral but increasing

MMRI (Risk measured by interest rates)         275                  -6              High risk

U.S. 10yr-bond yield                                        4.25              +0.05           Slight improvement

Fear & Greed Bitcoin                                       44                  +24             Neutral

CSI (Consumer Sentiment)                             71.1               -9.6%           Bearish

U.S. Economy                                        UP/DOWN       LEVEL

LEI (Overall leading indicators)                          Down            Bearish

GDP (Gross Domestic Product)                       Even             Neutral     

ISM/PMI (Producers Manufacturing Index)    Slight Down     Bearish    

CPI (Consumer Price Index)                                  Up                Bearish       

       (Minus Food & Energy)                                  Up                Bearish

Consumer Confidence                                      Down         8-month Low  

Personal Consumption/Retail Spending              Down             Bearish           

JOLTS (Unemployment categories)                      Even              Bearish

ADP (Jobs – non-farm payroll added)                  In-line             Neutral     

         (Initial and continued claims)                      In-line             Neutral

Transports (Shipping, durable goods orders)      Down             Bearish     

Real Estate (New/existing sales)                          Mixed             Bearish    

  (Housing starts/Construction Public/Private)   Mixed             Neutral

Mortgage demand                                                 Down              Bearish    

Business Activity                                                  Down              Bearish 

*This section updated on March 28, 2025

**LTE = Lower than expected (bearish) / HTE = Higher than expected (bullish)

***We may not present the most recent numbers (often revised, and unreported in the mainstream media). Actual figures and charts can be found on the internet, including the FRED (Federal Reserve Economic Data) website.

Price Action                                     UP/DOWN        LEVEL

RSI (Relative Price Strength)                          Up                 Neutral

PCR (Put to Call Ratio – 5 day avg)              Even               Bearish

ADL (Advance/Decline line)                        Down              Bearish          

MFI (Money Flow Index)                          Down             Bearish 

Institutional Trading                                      Selling             Bearish

Commodities                            MO. END   % CHANGE    LEVEL

Gold to Silver Ratio                          90.5               -1.2              Slight silver bias

Crude Oil                                          69.04            -0.34             Very slight decrease

** Effective January 2025, we have now added another category revealing the 20, 50, and 200-day percentage of stocks reaching cycle highs for the Dow Jones Industrial Average (DJIA), S&P 500, Nasdaq Composite (QQQ) and Russell 2000 Small Cap Index (IWM), with periodic commentary.

Index Pct of Highs      20-Day   50-Day   200-Day   Level

OVERALL Markets              34           26              35          Bearish

DJIA  (Blue Chips)                   27           27              50          Bearish

S&P 500  (Top 500)              37            34              40        Bearish

QQQ  (Technology)                25           30             41         Bearish

IWM  (Small Caps)                  29            18            28          Bearish

     As introduced in Chapter 3 of our publication When to Buy and When to Sell: Combining Easy Indicators, Charts, and Financial Astrology (available on Amazon), there are several “leading indicators” that go largely unnoticed and under-utilized by the average beginner or intermediate investor. Some of these indicators measure human emotion and market sentiment that often determines shorter term price action, while others uncover the true conditions of the economy, institutional buying and selling, and risk levels. 

      In our monthly “Indicator Insights” blog (first weekend of each month) we report the previous month-end levels (pertaining to the U.S. economy and/or the S&P 500) regarding several of these easy-to-read gauges (as well as others) to provide a quick-guide for our readers, with periodic analysis when necessary. Our monthly updates in this blog section include several market psychology related gauges, including the S&P 500 Fear & Greed index updated level, although there will be no commentary, as we dedicate an entire separate weekly blog to that specific indicator.   

       In the last edition, covering February of 2025, we noted the sustained negative tone to most economic indicators. The rise of mortgage loan/rent defaults, job loss, and personal debt, all continued putting pressure on the retail, manufacturing, and real estate sectors, which has not changed in March. Despite the jobs market reports holding steady (remember they often get revised), defaults are still increasing. In addition, February is a seasonably weak month in the equity markets, which again held true with a decline of 1.4%. 

      “Readings of note” this month includes all 10 components of the Leading Economic Index (LEI) remaining bearish across the board (indicator fell again), which was finally reflected in the equity markets. These components include several manufacturing categories, initial claims for unemployment, building permits, the Credit Index, and S&P 500. Weakness in many housing industry categories continued, including home sales and mortgage applications, due to the affordability issues. Consumer Confidence and Sentiment also remained very weak, hitting an 8-month low, with less spending taking a heavy toll on the retail and luxury (Consumer Discretionary), and real estate sectors. That, and the uncertainty regarding the ever-changing “tariff” threats between countries across the globe, took a toll on the equities market. We also highlighted our Money Flow category this month as it continued to decrease. Investment capital normally shifts and rotates between stocks and bonds based on interest rate fluctuations and sector rotation. When stocks are sold in favor of bonds it is referred to as “Flight to Quality.” Recently, however, the stock sells have resulted in holding larger cash positions, rather than purchasing bonds, causing the flow into equities to decrease.  

      The Federal Reserve committee members have again reported “concern” regarding the need to cut interest rates, which they are predictably starting to blame on the new administration, despite the fact they suddenly cut rates by 0.50% last October, just prior to the election, and another 0.25% in December, after the election. Some bottom-fishing of stocks on sale, and the previously discussed Quarter-end window dressing (when fund managers shuffle their portfolios in favor of strong stocks) did provide a brief boost toward the end of the month, before the plunge on Friday, March 28.   

      As we often mention in our weekly Fear & Greed Index blogs, the gauge normally reacts quickly to extreme readings (below 25 or over 75). The reading, which spent most of the month in Extreme Fear level, reached a low of 15 on March 10, then made a brief move above that level on the last week of the month, before succumbing to the March 28 decline, and returning to Extreme Fear. Look for improving conditions in the next few months, though it may be slow.      

      As discussed during the past several months, the markets performed much better than the underlying economic figures suggested, as they continued to be propped-up artificially between signs of the government buying its own debt, military conflict spending, and interest rate/bond manipulation. This month’s GDP reading, however, also came in “lower than expected,” at 2.3, vs a consensus estimated 2.6. “Lower than expected” seems to be the current term for “we were wrong” or in some cases “lied,” as it happens far too often within these weekly, monthly, and annual reports. Though there are several factors, if overseas conflict activities decrease, the GDP could face a larger reduction, as manufacturing and production would decline further.  

      Remember to keep your stop-loss orders mental (not in the system), and keep some cash aside to take advantage of buying opportunities. Also, short-term investors and traders should beware of any false rallies, as the tariff news seems to change every day.  

***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.