FEAR & GREED INDEX 46
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 46 as of the close on Friday, January 31, 2025.
This figure has remained in the Neutral category, as it slipped only 3 points from last Friday’s close of 49, recovering slightly from Monday’s larger temporary decline in Fear. The S&P 500 dropped about 60 points from 6,101 to 6,040, closing the week down about 1%. While the S&P 500 and the Dow Jones Industrial Average flirted with All-Time Highs again, both pulled back to end the week, while the Nasdaq struggled a bit more. Meanwhile, the Russell 2000 small cap index, continues to lag as those companies are highly interest sensitive.
The “Risk-On” sentiment slowed by week’s end as well, as commodities rose, and the 10-year bond yields remained fairly stable, closing the week down just .07, from 4.62%, to 4.54%. The perception of possible rate cuts in 2025 remained, at least for the time being, despite remarks at Wednesday’s FOMC meeting.
The 7 internal factors used to formulate this index are listed below:
Market Momentum – (S&P 500 vs its 125-day moving avg) = FEAR
Market Volatility (measured by the VIX) = NEUTRAL
Put to Call Ratio 5-day avg. (# of Puts (bearish) vs Calls (bullish) = GREED
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) = NEUTRAL
Safe-Haven Demand (which measures stocks vs bonds) = GREED
Junk Bond Demand (non-govt. bond yield spread) = GREED
This week, 4 of the 7 factors changed levels, with Market Momentum slipping once again after rising for the 2 straight weeks. Stock Price Strength remained in the Extreme Fear level, while Stock Price Breadth inched up again to the Neutral level, continuing to show improvement in the number of stocks participating in the recent rally. Safe-Haven Demand returned to Greed, from Fear, as commodities generally rose, and “Risk-On” (technology and cryptocurrencies) declined at week’s end. As mentioned for several weeks, the signs of continued weak underlying conditions indicates that we need to be very selective with stock choice.
The VIX, measured by Market Volatility, rose 1.6 points during the current week, settling in at 16.4, from 14.8, during a more volatile period, though it technically remains in Neutral territory despite increasing uncertainty and a drop in positive sentiment.
The January Effect presumably came to and on Friday, January 31, with the S&P 500 officially ending the month up approximately almost 1%. As we have stated, the first month of the year, for several reasons, is used as a barometer for the remaining 11 months. January did end in positive territory, a perceived bullish sign, despite high volatility through most of the month.
This week’s news had an immediate impact on equity markets, first thing on Monday morning, as a China AI company named DeepSeek, made claims that they have solved AI solutions at 95% cheaper costs than the standard leaders in the industry. This affected well-known AI stocks like NVDA, META, GOOGL, and MSFT, which plunged pre-market. Although they recovered somewhat as the week progressed, the uncertainty continues, even if only temporarily. The FOMC meeting on Wednesday was curious, as usual, as chairman Jerome Powell stated that there is “no hurry to cut rates,” in his usual non-committal, confusing, testimony. As we have mentioned on many occasions, this begs the question as to “why the sudden large rate cut in the Fall,” as inflation remains high, with no improvement year-over-year, despite claims to the contrary.
Astrologically, the Uranus retrograde finally ended on Thursday, January 30, but not without one last sucker punch on Monday (due to the DeepSeek report). The Mars planetary retrograde energies remain in effect, as the planet remains in the sign of Cancer, and continues to signify the “protection of the home.” This is evident by the suddenly aggressive determination to secure and protect the country by the new administration. Mars will finally end its retrograde in the 3rd week of February, but will remain in Cancer until early April. The threat of global conflict continues under this aspect, as we have discussed in recent blogs. Many “hidden truths” and “deceptive practices” have also continued to be uncovered (related to Neptune and Saturn in Pisces). Pluto in Aquarius themes, which favors the “people” over “government” controls (discussed in previous Trader Transit, Planet Power, and weekly blogs), appear to be starting to set in.
Aquarius “season” (with the Sun in that sign), which lasts until February 18 is now in full effect. As noted, the sign of Aquarius signifies a “freer and liberating” type of energy, although February is historically the 2nd weakest month for equities. Please see our Sign Language – Aquarius blog, dated 1-7-25, for more details.
The planet Venus (money), also remains in the sign of Pisces until this Tuesday, February 4, when it will ingress the sign of Aries (ruled by Mars). The generally positive “vibe,” illusions of grandeur, and idealism, will be replaced by more aggressive energies, suggesting more uncertainty in the markets. Look for more potential reversals and volatility in the short term as a result. Remember that Mars is in retrograde, and has moved back into the sign of Cancer for the time being. There is also a Venus retrograde approaching, beginning on March 1st, and remaining until April 12, which often results in market pullbacks. During this time frame Venus will move back and forth between Aries and Pisces until early June. We will discuss this in an upcoming blog in the next few weeks.
The planet Mercury has now also entered the sign of Aquarius (Monday, January 27), and will remain until February 22. Mercury’s short conjunction with Pluto, is bound to spark much controversy and outspoken arguments regarding the transformation in the U.S.
Look for sectors such as financials, defense, communications, technology, gold/silver, and cryptocurrencies to continue to be in focus, again with some volatility. In the longer term, certain subsectors of the technology industry are likely to continue their advance into the future as well, including AI, robotics, quantum computing, and space development (Pluto in Aquarius, and Uranus ingress Gemini mid-2025).
Gold (ruled by the Sun), and Silver (ruled by the Moon), rose again this week, as treasury yields and the U.S. Dollar remained stable, with the “Risk-On” sentiment waning. Also, the recent Mars transit through Cancer (from early September to early November), resulted in gains in gold, which is now Mars’ position again through early April. As we have noted on several occasions recently, any decline in metals will more than likely be short-lived (as the dollar strength may be temporary) and continue to be long-term buying opportunities on any pullbacks. The Gold to Silver ratio (covered in our publication) reached 90 last week, indicating silver may currently be a slightly better value buy than gold, but pulled back to 88 by Friday.
***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.
