FEAR & GREED INDEX 64
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 64 as of the close on Friday, May 23, 2025.
This figure has now settled into the mid-Greed level, falling 7 points from last week’s close of 71. This was reflected in the S&P 500, which slid about 154 points from 5,957 to 5,803, for a loss of just over 2.5%. For several weeks we have noted that the four major indexes, which include the S&P 500, Nasdaq, Dow Jones Industrial, and Russell 2000 (small cap index), remained in bear market territory (when over 50% of their components continue to trade under their 200-day moving averages). Currently, the DJIA and Nasdaq have surpassed that level (at 60% and 52% respectively), and the S&P 500 is close at 46%. The Russell 2000, however. remains in deep bear territory at only 29%.
The “Risk-On” sentiment waned this week, as Consumer Sentiment remained very weak, and the stubborn 10-year bond yields rose slightly, from 4.45%, to 4.49%, as investors finally appeared to pay attention to this number after several weeks, on the heels of the U.S. debt downgrade by Moody’s from AAA to AA. Normally this results in higher borrowing costs for consumers, despite the rating remaining quite high.
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) = GREED
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 GREED
This week, only 1 of these 7 factors changed levels, as 4 of the 7 remain in Greed or Extreme Greed. The fact that Market Momentum remains at a low level (as it does take time for a 125-day moving average to rise after a steep drop), suggests investors should remain cautious. The more concerning change was the drop in the Put to Call Ratio over the past few days. This measure is a leading indicator, reflecting more bearish sentiment, at least in the short term.
The VIX itself, measured by Market Volatility, though still in Neutral territory, rose steadily throughout the week from 17.2 to 22.7, signifying increased market nervousness.
This week’s news was highlighted by low Consumer Sentiment, and the U.S. debt downgrade, as well as the announcements of new potential tariffs on tech giant Apple, and an investigation into a company named UnitedHealth Group (for allegedly paying nursing homes to reduce hospital transfers). Earnings season also continued with mixed results, with the big issue being 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. Most companies who have suspended their forward guidance have been met with selling. Overall, as noted, the recent Bear market condition improvement stalled, as about 38% of all stocks contained within the 4 major indexes are now trading over their 200-day moving averages, (down from 44% last week). Keep in mind that recession fears have not been fully quelled, with the Fed’s continuous inconsistent remarks regarding the economy from one week to another.
Astrologically, the planet Mars continues to be positioned in the sign of Leo, where it will remain until mid-June. As noted, during the same transit from early November to early January, markets reached their highs after the election, and so far, the trend has again been bullish. However, Mars is in opposition to Pluto, and Pluto turned retrograde (last week) in the sign of Aquarius (until mid-October). Pluto is known to break down and restructure, while Mars likes to go full speed ahead, so beware more push and pull in the price action in the next few weeks.
Taurus season (April 20 – May 20), signifying “grounded” energies, has now ended, giving way to Gemini season (May 21 – June 20) on Wednesday. Gemini, an air sign, re-ignites the indecisive, push and pull energies, replacing the calm and steady Taurus. Please review our Sign Language – Gemini Season blog, dated 5-10-25 for more details. As the planet Mercury also enters Gemini (one of its two “home” signs) this weekend, the overthinking, back and forth uncertainty will increase over the next few weeks, which usually results in extra volatility.
Other transits of note last week included the Sun conjunct Uranus, which resulted in a sudden drop early in the week (especially on Wednesday), following unexpected news over the weekend. The planet Saturn has now moved into the sign of Aries, where it will remain for about 2 ½ years, signifying a restriction on the recent aggressive energies. Please review our recent Trader Transit – Saturn in Aries blog, dated 5-8-25 for further details.
As discussed in the past few weeks, the “Sell in May and Go Away” seasonal concept is also upon us. As published 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. Combining algorithmic, programmed machine trading, with the seasonally strong July (now the 2nd best performing month of the year), and May seemingly no longer following that seasonal trend, this strategy may no longer be true. Continue to monitor the VIX closely for investor sentiment levels, as a reading under 20 is normally favorable for price appreciation. After the recent strong rally, there it is likely the markets will again be volatile for the near future.
Leading sectors with over 50% of stocks trading over their 200-MAs continue to include only Communications Services and Utilities (both over 70%). Financials (54%) is the only other sector remaining over 50%, as Industrials, Information Technology, and Consumer Discretionary remain just below at 49%. 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), began to rise again this week. As we noted the last few weeks, the pullback was likely, as Mars entered Leo, after its 2nd recent successful stay in Cancer. The decrease in Risk-On sentiment throughout the week triggered another rally in gold (considered a safe-haven/hedge) and silver, which is common. The Gold to Silver Ratio (covered in our publication) remained disproportionate after closing at 99.4 last week, rising about 1 point to 100.4 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.
