FEAR & GREED INDEX 43
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 43 as of the close on Friday, May 2, 2025.
This figure moved into the Neutral level briefly on Thursday of this week, before settling back just into the upper edge of Fear by the close on Friday, rising 8 points from last week’s reading of 35. This marks the 3rd straight week of improvement since the historically low reading of 4 (in the first week of April). Although it took a few weeks, the high probability bounce from that extreme level has occurred as expected (which we often discuss). During this week, the S&P 500 rose about 261 points from 5,525 to 5,686, for a significant gain of 4.7%. Though there are clear signs of some relief, the four major indexes, which include the S&P 500, Nasdaq, Dow Jones Industrial, and Russell 2000 (small cap index), remain in bear market territory (as over 50% of their components continue to trade under their 200-day moving averages - though the Nasdaq and DIA are very close).
The “Risk-On” sentiment continued again this week, despite some negative earnings reports in chip and technology stocks. As we publish this report, the S&P 500 has enjoyed a 9 consecutive day rally, during which it has gained 528 points, or a whopping 10.3% (exceeding the average yearly return in the S&P in only 9 days). 10-year bond yields started the week lower, but ending basically flat at 4.33%, after beginning the week at 4.32%. The stock and bond market volatility both settled down to some degree, which resulted in more sideline cash being put to work in stocks.
The 7 internal factors used to formulate this index are listed on the screen (below):
Market Momentum – (S&P 500 vs its 125-day moving avg) = EXTREME FEAR
Market Volatility (measured by the VIX) = NEUTRAL
Put to Call Ratio 5-day avg. (# of Puts (bearish) vs Calls (bullish) = FEAR
Stock Price Strength (# of new 52-week highs vs new 52-week lows) = EXTREME FEAR
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) = EXTREME FEAR
This week, 4 of these 7 factors changed levels, as 3 of the 7 still remain in the Extreme Fear category. With Market Momentum and Stock Price Strength still showing Extreme Fear, we are not out of the woods yet, and patience is a virtue until conditions improve. As we have warned for several weeks, stock selection remains the key with continued weak underlying conditions, and share sizes should remain small if one chooses to bargain hunt the highest quality stocks. Junk Bond demand fell significantly, which had been expected, as these corporate bonds fall the furthest in weak economic times.
The VIX itself, measured by Market Volatility, dropped just over 2 points, ending the week at 22.7, (from 24.8), signifying less fear. Uncertainty continues, however, as the tariff negotiations continue to change daily, and the VIX is still just a bit high for the markets liking.
Earnings season continued this week, with several major companies reporting mixed results. The big issue with this earnings season is that many companies cannot provide the all-important forward guidance, as the unresolved tariff situation does not allow them to properly gauge their future sales/revenue. Overall, the Bear market conditions continued to improve, as about 35% of all stocks contained within the 4 major indexes are now trading over their 200-day moving averages, (up from 29% last week). Remember, as we have warned for several weeks, any bullish price action may be temporary, so proceed with caution as a potential bottom is being established. Though bottom fishing can be lucrative, the odds are not in your favor, and a true bullish trend will not begin again until over 50% of any index’ stocks are trading over the 200 MA.
Astrologically, the planet Mars has fully settled into the sign of Leo (as of April 18), where it will remain until mid-June. This signifies a return to this sign position of early November to early January, when markets reached their highs after the election, and so far, the trend has been bullish. Mars in Leo symbolizes aggressive action as well, which is evident with many global leaders becoming stubborn and combative regarding the tariff situation. This time, however, Mars is in opposition to Pluto, and Pluto has now turned retrograde (today) in the sign of Aquarius (until mid-October). Pluto likes to break down and restructure, while Mars likes to go full speed ahead, so beware more push and pull in the price action.
Taurus season has settled in (April 20 – May 20), signifying much less aggressive, and more “grounded” energies than Aries. Taurus normally provides a calming effect on the markets, as it is ruled by Venus, which has been reflected in the decrease in market volatility throughout the past 2 weeks. Please review our Sign Language – Taurus Season blog, dated 4-7-25 for more details.
The “Sell in May and Go Away” seasonal concept is also upon us, however, as noted in last year’s blog, dated 4-15-24, and our recent blog, dated 4-18-25, that effect has not held true nearly as much in recent years, with July becoming the 2nd best performing month of the year. Venus (money) has now entered the sign of Aries (aggression and determination), where it will remain until June 6, signifying further potential sharp movements in the dollar. Despite the recent easing of volatility, the tariff situation still hangs over the head of the global economy, and more uneven price action could persist, should conflicting/aggressive comments continue. Watch the VIX closely, as a steady drop would support less volatile price action, and more money flow back into the markets. For the time being, we do continue to promote reducing share size on holdings for those with a shorter-term investment time frame, until the coast is clear. For those who follow Fibonacci Retracements, the S&P and Nasdaq are now very close to the 50% line, so watch closely.
Leading sectors include Communications Services and Utilities (the only sectors with more than 50% of stocks over their 200-day MA), as well as defensive, and gold/silver (which experienced at pullback this week). Conversely, all sectors are well above that level regarding their 20-day MA, and most their 50-day, reflecting the current rally, which could be forming a “bear flag” (for those familiar with technical chart analysis). Be aware, however, that a steady return to speculative/technology stocks, would affect the latter three. As previously stated, it is important for financials, technology, and industrials, to lead the way for a sustained rally. In the long run, sectors of the technology industry are likely to continue their advance into the future, including AI, robotics, quantum computing, and space development (with Pluto in Aquarius, and Uranus upcoming ingress to Gemini in mid-2025).
Gold (ruled by the Sun), and Silver (ruled by the Moon), both declined throughout this week, as the market rallied. As we noted last week, the pullback was likely, as Mars entered Leo, after its 2nd recent successful stay in Cancer. The increased Risk-On sentiment also contributed to the gold pullback, as gold is considered a safe haven/hedge. The Gold to Silver Ratio (covered in our publication) remained disproportionate after closing at 100 last week, and remaining elevated at 101.1 this week, indicating silver continues to be a better value buy than gold. As we have expressed in recent months, any dip in these metals has been short-lived, and they continue to be long-term buying opportunities on any such declines.
***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.
