FEAR & GREED INDEX 78
78 – EXTREME GREED
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 78 as of the close on Thursday, July 3, 2025.
This figure has reached the Extreme Greed level, after rising about 13 points from last week’s close of 65. This was reflected in the S&P 500, which rose about 106 points from 6,173 to 6,279, in the holiday-shortened 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), remained in bear market territory (when over 50% of their components continue to trade under their 200-day moving averages). Currently, all four have finally reached that mark, with the Russell 2000, after lagging for a prolonged period, finally reaching exactly 50%. The Nasdaq now leads at 70%, while the DJIA stands at 70%, and the S&P 500 at 61%, all up significantly from last week. Overall, the average of these 4 major indexes now sits at 54.5%, finally moving into bullish territory. This suggests that the rally over the last two months has become more broad-based, and on more solid ground.
The “Risk-On” sentiment has continued this week, as market nervousness and uncertainty remained lower, though the 10-year bond yields decreased from 4.28%, to 4.35%.
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) = GREED
Market Volatility (measured by the VIX) = NEUTRAL
Put to Call Ratio 5-day avg. (# of Puts (bearish) vs Calls (bullish) = EXTREME GREED
Stock Price Strength (# of new 52-week highs vs new 52-week lows) = EXTREME 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, 5 of these 7 factors changed levels, as Extreme Greed, has taken over the sentiment of the market. This type of emotion normally indicates a slow down in the bullish price action, and a pullback or correction. The rally may still have legs in this seasonally favorable time, however, be extra focused on profit taking and mental stop losses, as the rally usually fades toward the end of the July.
The VIX, measured by Market Volatility, remains in Neutral territory, remaining steady, from 16.3 to 16.4. The “20” level on the VIX is often considered a crucial level, as anything under suggests calm markets, and anything over reflects more uncertainty/nervousness among investors and traders.
This week’s news was highlighted by more declines in economic categories including job creation and construction spending, though there were slight gains in manufacturing. Jobs creation and unemployment remain a key concern to watch. Keep in mind that fears of a recession (defined as 2 consecutive negative GDP quarters) have not been fully quelled, with the Fed’s continuous inconsistent remarks regarding the economy from one week to another, combined with last week’s 2nd quarter contraction in GDP. As also noted in the last few weeks, a recent poll of CEO’s revealed 83% are expecting a recession over the next few quarters.
As recently discussed, the “quarterly window dressing” (when fund managers add high performing stocks to their portfolios) and the annual Russell Re-alignment (when stocks are added and subtracted from that index), helped boost stocks last week. The rise in the markets throughout this week was no surprise considering these two events. Please see our publication and our Financial Focus – Russell re-alignment blog, dated 5-28-25 for more details. Furthermore, July has become the 2nd best performing month for stocks over the past couple of decades. Be cautiously optimistic as there are some headwinds.
Astrologically, the planet Mars completed its stay in the sign of Leo, and has moved into the sign of Virgo. While in Leo, the equities markets performed as expected (noted in our recent weekly blogs), repeating its late 2024 uptrend, once again approaching All-Time Highs under this transit. Mars’ square with Uranus last week, however, immediately resulted in the unexpected aggressions in the Middle East. Mars in Virgo changes the landscape to a more selective process (as Virgo seeks perfection), where underperforming companies will likely be punished. It may be time to take profits on some investments that surged over the past two months, especially those were just along for the ride.
Cancer season has now kicked in (June 21 – July 21), which symbolizes emotional and protective energies. Please review our Sign Language – Cancer Season blog, dated 6-10-25 for more details. As the planet Mercury traveled through Cancer the past couple of weeks, there were many emotional reactions to the verbal sparring (Mercury) regarding the Middle-East tensions, especially when Mercury was conjunct Jupiter, which expanded those energies. This resulted in a back-and-forth market, based on the increased uncertainty. Be careful not to over-react to the news, or any other sudden reports, regarding interest rates, recession, or the overall economy. The recent entry of Jupiter into the sign of Cancer, which often ignites a rally in silver, started just a few days early, leveled off, and is now rising again (Please review our recent Trader Transits – Jupiter in Cancer blog, dated 5-22-25). Jupiter also conjunct the Sun (which occurs once per year) on Tuesday, June 24, considered the “luckiest” transit of the year! Right on cue, the markets shot up, and have been positive since.
The Mars/Uranus square, signifying sudden, aggressive, action, which coincided directly with the Middle east occurrence a few weeks ago, is pulling away. This would suggest an easing of tensions, but not necessarily a resolution. As Mercury travels towards Leo, 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 has increased, including Communications Services (83%), Information Technology (74%), Industrials (73%), and Financials (70%), all of which are historically important during bull market runs. 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 upcoming ingress to Gemini in about 1 week).
Gold (ruled by the Sun), and Silver (ruled by the Moon), resumed their gains this week, despite the continuation of Risk-On sentiment. As noted, Jupiter (expansion) entered Cancer (ruled by the Moon) on June 9, signifying a potential much-anticipated rally in silver, as the Moon rules that metal as well. Also, as we have reported for several weeks, the Gold to Silver Ratio (covered in our publication) had remained disproportionately in favor of silver, though it has been decreasing of late ending this week at 90.4, after last week’s close of 90.8. The outlook remains the same for both, however, as any dip in these metals continues to be a long-term buying opportunity.
***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.
