FEAR & GREED INDEX 50
Weekly Update
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 50 as of the close on Friday, August 1, 2025.
This figure has dipped to the Neutral level, after several weeks at the cusp of Greed and Extreme Greed, ending the week 24 points lower than last week’s close of 74, mainly plunging in the last two days. The S&P 500 dropped about 151 points, from 6,388 to 6,237, as investor sentiment turned south at the end of the week. For several weeks we have focused on the fact that the four major indexes, which include the S&P 500, Nasdaq, Dow Jones Industrial, and Russell 2000 (small cap index), had methodically improved from bear market territory (when over 50% of their components continue to trade under their 200-day moving averages), to bullish sentiment (over 50%). Last week, 3 of 4 remained comfortably above that mark, though the Russell 2000 had slipped back below, at 47%. This week the Russell plunged to 37%, while the overall market (the average of these 4 major indexes) also dropped considerably, ending the week at 45%, returning to slightly bearish territory, after last week’s close of 54%. Currently, the 20-day moving average for all 4 indices have also decreased heavily, as the momentum seems to have faded.
The “Risk-On” sentiment drastically changed at the end of this week with a “Flight-to-Quality” shift, as market nervousness/uncertainty spiked, with the 10-year bond yields dropping to 4.22%, after closing last week at 4.39%.“Flight-to-Quality” refers to investors transferring funds from stocks to bonds, for less risk.
The 7 internal factors used to formulate this gauge are listed on the screen (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) = FEAR
Stock Price Strength (# of new 52-week highs vs new 52-week lows) = GREED
Stock Price Breadth (# of shares rising vs falling on NYSE) = GREED
Safe-Haven Demand (which measures stocks vs bonds) = FEAR
Junk Bond Demand (non-govt. bond yield spread) = FEAR
This week, 6 of these 7 factors changed levels as the Extreme Greed was replaced by less confident sentiment in the last two days of the week. The Put to Call Ratio slid back from Greed to Fear, as more traders added Puts (bearish trades) after the 2-month rally. This type of emotion normally indicates a slow-down in the bullish price action, and a consolidation, pullback, or correction. The rally may still have legs, though the expected uptick on volatility has arrived. As we have noted recently, the seasonal rally usually fades toward the end of the July. It is no surprise that these levels worsened as the Fear & Greed Index plunged.
The VIX, measured by Market Volatility, remains in Neutral territory, though heightened at 20.4, surging from last week’s close of 14.9. The “20” level on the VIX is often considered a crucial level, as anything under 20 suggests calm markets, and anything over reflects more uncertainty/nervousness among investors and traders. This reading had been steadily moving downward, away from that mark, which we noted last week was approaching a level that often sees a reversal, and to be ready for increased volatility.
This week’s news included some positive economic readings, and earnings, though still a mixed bag, with the two biggest news items announced on Thursday (after the close) and Friday. On Thursday night, executive orders were signed regarding tariffs on several foreign countries. On Friday, unemployment figures, which appeared to be remaining steady, were revised significantly downward (where have we heard that before?), prompting a firing at the top of the Labor & Statistics department. The Federal Reserve had also just announced their continued “wait and see” approach to lowering interest rates, just prior that revision. Combined with negative reports concerning consumer spending and pressure on the housing market, equities took a large hit.
Astrologically, Leo season (July 22 – Aug 22) has settled in, following another positive Cancer season in the markets. The emotional and protective energies of Cancer have now transformed into the proud and outgoing energies of Leo, normally reflected in world leaders and CEOs. Please review our Sign Language – Leo Season blog, dated 7-10-25 for more details. As noted, Cancer season, which is normally very solid, ended with a gain of almost 1% in the S&P. Leo season is typically weak, which finally kicked in by weeks end. The planet Venus moving into Cancer also suggests that emotions should be kept in check, and one should not fall victim to FOMO (Fear of Missing Out), as discussed in our recent Trader Transits – Venus in Cancer blog, dated 7-21-25.
Also, Mercury turned retrograde on Friday (July 18), just a few days prior to the start of Leo season. Mercury Retrograde often results in volatility and pullbacks as well, and lasts about 3 weeks (through August 11). Please review our Planet Power – Mercury Retrograde blog, dated 4-1-24 for more details. Although this period began rather calm, uncertainty escalated on Thursday and Friday. As we noted the last few weeks, tensions could increase again between world leaders, which always affects the markets short-term.
Leading sectors, with over 50% of stocks trading over their 200-MAs, continue to include Utilities and Communications Services, the only 2 over 70%. Information Technology, Consumer Discretionary, and Industrials also remain above 50% (in the 60% range), which were boosted by some positive earnings, while Energy, Consumer Staples, and Real Estate have continued to lag. In the long run, sectors of the technology industry that are likely to continue their advance into the future include AI, robotics, quantum computing, and space development (with Pluto in Aquarius, and Uranus recent ingress into Gemini).
Gold (ruled by the Sun), and Silver (ruled by the Moon), slumped this week, with the firming of the U.S. dollar, until a safe-haven bias resurgence on Friday. As previously noted, the Jupiter in Cancer (ruled by the Moon) transit, which began on June 9, jump-started a much-anticipated rally in silver, as the Moon rules that metal as well. The Gold to Silver Ratio (covered in our publication), which had remained disproportionately in favor of silver for quite some time, has been steady in the past month, closing at 90.7, after last week’s close of 87.2, remaining near its lowest level since mid-December. The outlook remains the same for both, however, as any dip in these metals continues to be a long-term buying opportunity. Copper has also been rallying heavily after a sharp downturn, and its strength should continue absent any recession concerns.
***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.
