INIDICATOR INSIGHTS

Monthly Update

CATEGORY                                                       

Market Sentiment/Risk                   MO. END   CHANGE    LEVEL

Fear & Greed Index (Market sentiment)          61                -6             Greed

VIX (S&P 500 Volatility measure)                 18.6             +1.9           Neutral

MMRI (Risk measured by interest rates)         273             +18            High risk

U.S. 10yr-bond yield                                        4.38            +.14            Increase

Fear & Greed Bitcoin                                        62              +10            Neutral

CSI (Consumer Sentiment)                              61.8             +1.1            Bullish

U.S. Economy                                        UP/DOWN       LEVEL

LEI (Overall leading indicators)                          Down             Bearish    *3 straight months

GDP (Gross Domestic Product)                             Up                Bullish     

ISM/PMI (Producers Manufacturing Index)     Slight Up          Bullish    

CPI (Consumer Price Index)                                  Up                Bearish       

       (Minus Food & Energy)                                  Up                 Bearish

Consumer Confidence/Retail Spending             Slight Up          Bullish     

Personal Consumption Expenditures                Slight Down       Bearish           

JOLTS (Unemployment categories)                     Even               Neutral

ADP (Jobs – non-farm payroll added)                  Down             Bearish         

         (Initial and continued jobless claims)       Slight Down      Bullish

Transports (Shipping, durable goods orders)        Down             Bearish     

Real Estate (New/existing sales)                           Down             Bearish    

  (Housing starts/Construction) Slight Down       Bearish

  (Mortgage demand)                                        Slight Up        *Neutral  

Business Activity/CEO Confidence                      Down              Bearish  

**This section updated on August 1, 2025

**LTE = Lower than expected (bearish) / HTE = Higher than expected (bullish)

***We may not present the most recent numbers (often revised, and unreported in the mainstream media). Actual figures and charts can be found on the internet, including the FRED (Federal Reserve Economic Data) website.

Price Action                                     UP/DOWN        LEVEL

RSI (Relative Price Strength)                      Down             Bearish

PCR (Put to Call Ratio – 5 day avg)           Up slightly         Bullish

ADL (Advance/Decline line)                        Down              Bearish          

MFI (Money Flow Index)                               Even               Neutral 

Institutional Trading                                      Selling              Bearish

Commodities                           MO. END   CHANGE    LEVEL

Gold to Silver Ratio                         90.1              -1.4           Neutral

Crude Oil                                          69.19          +4.23          Increase/Volatile

** Effective January 2025, we have now added another category revealing the 20, 50, and 200-day percentage of stocks reaching cycle highs for the Dow Jones Industrial Average (DJIA), S&P 500, Nasdaq Composite (QQQ) and Russell 2000 Small Cap Index (IWM), with periodic commentary.

Index Pct of Highs       20-Day   50-Day   200-Day   Level

OVERALL Markets              32           51             47          Neutral - decreasing

DJIA  (Blue Chips)                   37           53             73         Bullish longer term

S&P 500  (Top 500)             40            55             56          Bullish longer term

QQQ  (Technology)                34            52             52          Neutral

IWM  (Small Caps)             27            48            40          Bearish

    As introduced in Chapter 3 of our publication When to Buy and When to Sell: Combining Easy Indicators, Charts, and Financial Astrology (available on Amazon), there are several “leading indicators” that go largely unnoticed and under-utilized by the average beginner or intermediate investor. Some of these indicators measure human emotion and market sentiment that often determines shorter term price action, while others uncover the true conditions of the economy, institutional buying and selling, and risk levels. 

     In our monthly “Indicator Insights” blog (first weekend of each month) we report the previous month-end levels (pertaining to the U.S. economy and/or the S&P 500) regarding several of these easy-to-read gauges (as well as others) to provide a quick-guide for our readers, with periodic analysis when necessary. Our monthly updates in this blog section include several market psychology related gauges, including the S&P 500 Fear & Greed index updated level, although there will be no commentary, as we dedicate an entire separate weekly blog to that specific indicator. Please take a moment to review the attached figures. 

      In the last edition, covering June of 2025, we noted the sustained negative tone to most economic indicators, including the rise of mortgage loan/rent defaults, job loss, and personal debt, all continued putting pressure on the retail, manufacturing, and real estate sectors. Despite those factors, the equity markets thrived in June, recovering from the April lows of April 8. The S&P 500 ended the month with an exceptional 6.1% gain. The month of July (the 2nd most favorable month over the past few decades) followed with a solid 2.2% gain, after some initial volatility, extending the rally from those early April lows. 

      As we often mention, the Fear & Greed Index normally reacts quickly to extreme readings (below 25 or over 75). The reading spent most of July teetering between the Greed and Extreme Greed levels, ending the month in the lower Greed level, after declining the last few days of the month. Last month we suggested to look for a pullback should this gauge reach Extreme Greed, which is finally coming to fruition. 

      “Readings of note” in the month of July included the continuation of Leading Economic Index (LEI) bearish sentiment for the 3rd straight month, though slightly improved in some categories. This month, the Advance/Decline line again continued upward, adding to the reversal trend that began in the second half of April, though it has turned downward in the past week. This is important as it signifies a lower percentage of stocks advancing in the last week, contrary to the consistent advances in the past 2 months or so (indicated in our Index of Percentage Highs above).  

      The Federal Reserve continued its “wait and see” stance regarding rate policy just this week, despite some signs of weakness in the jobs and real estate markets. However, the sentiment may be changing as the mixed economic news may result in cuts beginning sometime in the early Fall. This month’s GDP was reported at 3.0, much higher than “expected,” after last month’s negative result. Though there are several factors attributed to this number, this seemingly avoids further recession worries for the time being.  

      The overall markets/indexes continued to climb since that April 8 low, though the recent decline in the number of stocks participating suggests some cracks. The markets have been over-extended as of late, and have been mainly carried by the large caps known as the Mag 7 (discussed in previous blogs). All the major indexes have now seen their number of stocks trading over their 200-day Moving Averages, dip, while the Russell 2000 small cap index, remains stubbornly below the important 50% mark, at only 40%, helping drag the overall average to 47%. Additionally, all four major indices, including the Russell, Dow Jones Industrial, S&P 500, and the Nasdaq, have all fallen well below that mark on their 20-day moving averages at months end. This indicates that some negative sentiment persists despite the large rally since early April, and suggests fragility in the current conditions.  

      Remember to keep your stop-loss orders mental (not in the system), and keep some cash aside to take advantage of buying opportunities (in either direction), as a weak seasonal period approaches. Also, short-term investors and traders should beware of any false rallies, as they occur often during bear market conditions, and the tariff and military conflict news seems to change daily.  

***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.