INDICATOR INSIGHTS
Monthly Update
CATEGORY
Market Sentiment/Risk MO. END %/CHANGE LEVEL
Fear & Greed Index (Market sentiment) 20 -26 Extreme Fear
VIX (S&P 500 Volatility measure) 19.6 +3.2 Neutral but increasing
MMRI (Risk measured by interest rates) 281 -25 High risk
U.S. 10yr-bond yield 4.2 -0.34 Slight improvement
Fear & Greed Bitcoin 20 -40 Extreme Fear
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) Even Neutral
CPI (Consumer Price Index) Up Bearish
(Minus Food & Energy) Up Bearish
Consumer Confidence Down 8-month Low
Personal Consumption/Retail Spending In-line Neutral
JOLTS (Unemployment categories) Increase Bearish
ADP (Jobs – non-farm payroll added) In-line Neutral
(Initial and continued claims) In-line Neutral
Transports (Shipping, durable goods orders) Up Bullish
Real Estate (New/existing sales) Down Bearish
(Housing starts/Construction) Down Bearish
Mortgage demand Down Bearish
Business Activity Down Bearish
*This section updated on February 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) Up Bearish
ADL (Advance/Decline line) Even Neutral (except Nasdaq bearish)
MFI (Money Flow Index) Even Neutral
Institutional Trading Selling Bearish
Commodities MO. END % CHANGE LEVEL
Gold to Silver Ratio 91.7 + 2.2 Slight silver bias
Crude Oil 69.38 -3.50 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 32 40 48 Bearish
DJIA (Blue Chips) 50 60 77 Bullish
S&P 500 (Top 500) 46 53 58 Slightly Bullish
QQQ (Technology) 31 39 51 Bearish
IWM (Small Caps) 23 30 43 Bear Market
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 January of 2025, we noted the sustained negative tone to most economic indicators, despite the continued rise in the equity markets. The rise of mortgage loan/rent defaults, job loss, and personal debt continued putting pressure on the retail, manufacturing, and real estate sectors. Despite the jobs market reports holding steady (remember they often get revised), defaults are still increasing.
“Readings of note” this month includes most economic indicators remaining bearish almost across the board. Reports over the last few weeks suggest continued weakness in many housing categories, including home sales and mortgage applications, as well as business activity. Consumer Confidence took a large hit as well, with overall costs and higher personal debt, highly affecting the retail and luxury sectors, with no sign of declining inflation. The Federal Reserve chairman maintained his “no hurry” to reduce rates stance in this month’s meeting, again verifying the widespread belief that rates should not have been suddenly cut by .50% (total of .75%) in the Fall. The argument that the cut was politically motivated is hard to argue.
In addition, the dominance of the leading large cap “mega” stocks, known as the Mag 7, that have held equity markets up for a long stretch of time, has subsided, at least for the time being. These stocks, which include Amazon, Apple, Google/Alphabet, Tesla, Nvidia, Meta, and Microsoft, were powering the market while very few others were making highs in the current cycle (only 22% of the S&P 500 stocks made new all-time highs in 2024). The ETF MAGS reflects these leading stocks, while the ETF RSP signifies the “equal weighted” S&P 500, which had been severely lagging. Recently, these conditions had started to improve with a broader rally, however the market fragility was on display again this week. As we can see in the Index Percentage of High’s chart, all indexes have declined since last month, and the Russell 2000 (IWM), which consists of small-cap stocks (that are highly interest rate sensitive) continues to be the biggest laggard (officially in a bear market as the 200-day is under 50%). The month of January was weaker than usual this year, which started to recover in February, until the late month dip. As we have mentioned in our weekly Fear & Greed Index blogs, the latter portion of February is seasonally weak, which ultimately held true. The current reading of Extreme Fear on both the SPY and Bitcoin reflects the current pain, but does suggest an upcoming bounce.
As mentioned during the past few months, the markets also continue 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 the overseas conflict activities decrease, the GDP could face a larger reduction, as manufacturing and production continue to be weak. The wild daily price swings of December have returned, and will likely continue for a while longer. The Advanced/Decline Line (ADL) and Money Flow Index (MFI), which turned a bit bullish last month, lost their momentum, and now remain flat. The market appears to be at a crossroads, with uncertainty ruling the price action. Remember to keep your stop-loss orders mental (not in the system), and keep some cash aside to take advantage of lower asset prices in the future, in the event “panic” sets in due to uncertain global conditions and panic selling.
***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.
