FEAR & GREED INDEX 71
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 71 as of the close on Friday, May 16, 2025. Please note that we did not post our weekly blog last week, due to vacation, and this week will include the missed period.
Over the last two weeks, this figure has quickly moved into the upper level of the Greed category (only 4 points from Extreme Greed), rising 9 points from last week’s reading of 62, and 28 from the previous week. The upward trend continues since the historically low reading of 4 (in the first week of April). During the two weeks, the S&P 500 rose about 271 points from 5,686 to 5,957, for a gain of 4.7%. 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), however the scenario has changed in all but the Russell 2000.
The “Risk-On” sentiment continued again this week, despite some negative earnings reports in chip and technology stocks. The S&P 500 has rallied on most days, and may be nearing a pause or pullback. 10-year bond yields have risen a bit in the past two weeks, from 4.31%, to 4.45%, indicating further caution as the increase is unusual with rising equities.
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) = GREED
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, 3 of these 7 factors changed levels, as 5 of the 7 have now reached Greed or Extreme Greed. Only Market Momentum remains at a low level, as it does take time for a 125-day moving average to rise after a steep drop. The market has been consistently becoming broader, with more stocks joining in the fun.
The VIX itself, measured by Market Volatility, continued to drop, from 22.7 to 17.2, signifying less and less fear by investors. The level has now reached a “safer” area for investors and traders, despite some continued uncertainty regarding tariff negotiations.
Earnings season continued this week, with mixed results, which affected retail sales and technology. 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. Most companies who suspended their forward guidance were met with selling. Overall, as noted, the Bear market conditions continued to improve, as about 44.6% of all stocks contained within the 4 major indexes are now trading over their 200-day moving averages, (up from 35% two weeks ago). At this point, a potential bottom may have been established for this cycle, though recession fears have not been fully quelled, with the Fed’s inconsistency.
Astrologically, the planet Mars remains positioned in 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. 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 (April 20 – May 20), signifying “grounded” energies is drawing near its close. Taurus has provided its expected calming effect on the markets (as it is ruled by Venus), which has been reflected with the decrease in market volatility throughout the past few weeks. We will now enter Gemini season this coming Wednesday, May 21, which re-ignites the indecisive, push and pull energies. Please review our Sign Language – Gemini Season blog, dated 5-10-25 for more details.
Other transits of note include the Sun conjunct Uranus this weekend, which could reflect some wild price action on Monday, and early in the week. This transit signifies a potential large move in either direction, though it should only last a few days, indicating the longer-term positions should not be heavily impacted. Watch for unexpected news over the weekend. The second is the ingress of the planet Saturn into the sign of Aries on Saturday, signifying a restriction on the current aggressive energies. Please review our recent Trader Transit – Saturn in Aries blog, dated 5-8-25 for further details. On another note, yesterday (Saturday) was the 233rd birthday of the United States Stock Exchange, which will soon experience its Uranus return.
The “Sell in May and Go Away” seasonal concept is also upon us, as we have mentioned the past few weeks. 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, which has now been true for the first half of May this year. Considering 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, as a steady drop would support less volatile price action, and continued money flow back into the markets.
Leading sectors include Communications Services and Utilities, now closely followed by Financials and Industrials (which rose above 50% of their 200-day MA’s). 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 peaked on Tuesday, then dropped throughout the rest of the 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 increased Risk-On sentiment normally contributes to a gold pullback, as gold is considered a safe-haven/hedge. The Gold to Silver Ratio (covered in our publication) remained disproportionate after closing at 101 two weeks ago, and closing at 99.4 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.
