INDICATOR INSIGHTS
Monthly Update
CATEGORY
Market Sentiment/Risk MO. END CHANGE LEVEL
Fear & Greed Index (Market sentiment) 62 +27 Greed
VIX (S&P 500 Volatility measure) 18.6 -6.1 Neutral
MMRI (Risk measured by interest rates) 272 +14 High risk
U.S. 10yr-bond yield 4.4 +.23 Increase
Fear & Greed Bitcoin 55 -12 Neutral
CSI (Consumer Sentiment) 52.2 0 Bearish (5-yr lows)
U.S. Economy UP/DOWN LEVEL
LEI (Overall leading indicators) Down Bearish
GDP (Gross Domestic Product) In-Line Neutral
ISM/PMI (Producers Manufacturing Index ) Slight Up Bullish
CPI (Consumer Price Index) Up Bearish
(Minus Food & Energy) Up Bearish
Consumer Confidence Mixed Neutral *Uptick in last week
Personal Consumption/Retail Spending Down Bearish
JOLTS (Unemployment categories) Down Bearish
ADP (Jobs – non-farm payroll added) Down Bearish For the economy
(Initial and continued claims) In-line Neutral
Transports (Shipping, durable goods orders) Down Bearish
Real Estate (New/existing sales) Down Bearish
(Housing starts/Construction Public/Private) Down Bearish
(Mortgage demand) Down Bearish
Business Activity/CEO Confidence Down Bearish *Large decrease
**This section updated on May 30, 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) Up Bullish
PCR (Put to Call Ratio – 5 day avg) Slight Down Bullish
ADL (Advance/Decline line) Up Bullish
MFI (Money Flow Index) Even Neutral
Institutional Trading Selling Bearish
Commodities MO. END CHANGE LEVEL
Gold to Silver Ratio 99.6 -0.9 Silver bias
Crude Oil 60.79 +4.29 Increase
** 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 52 64 40 Bearish - improving
DJIA (Blue Chips) 67 70 63 Bullish
S&P 500 (Top 500) 61 68 48 Bearish - improving
QQQ (Technology) 49 66 43 Bearish
IWM (Small Caps) 55 64 32 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 April of 2025, we noted the sustained negative tone to most economic indicators. The rise of mortgage loan/rent defaults, job loss, and personal debt, all continued putting pressure on the retail, manufacturing, and real estate sectors, which did not change much until the very end of May. Despite little change, the equity markets thrived in May after significant weakness through the first half of April (culminating in a cycle bottom on April 8). The S&P 500 ended the month with a 6.1% gain, thwarting the old “Sell in May and Go Away” theory from the past (see our previous Quick Quotes – Sell in May and Go Away blogs, dated 4-15-24 and 4-18-25.
As we often mention, the Fear & Greed Index normally reacts quickly to extreme readings (below 25 or over 75). The reading, which spent most of April advancing from the Extreme Fear category to the Neutral level, reached 71 (higher Greed) in mid-May, and settled in at 62 (lower Greed) to end the month.
“Readings of note” in the month of May included the continuation of Leading Economic Index (LEI) bearish sentiment, though slightly improved in some categories. Consumer Confidence and Sentiment also remained very weak, hitting multi-decade lows (before slight improvement in the last week), with less spending taking a heavy toll on the retail/luxury (Consumer Discretionary), and real estate sectors. That, and the uncertainty regarding the ever-changing “tariff” threats between countries across the globe, continued to weigh on high-end purchases. Last month we highlighted our Money Flow category, as it continued to decrease as institutions and investors had moved to larger cash positions, due to the uncertainty. The index has remained relatively flat in May, with $7 trillion remaining “on the sidelines.” This month, the Advance/Decline line continued upward, adding to the reversal trend that began in the second half of April. This is important as it signifies a higher percentage of stocks advancing in the last month or so, indicated in our Index of Percentage Highs above.
We also highlighted the Business Activity/CEO Confidence category this month as just a few days ago the vast majority of CEOs (83%) said they expect a recession in the next 12-18 months, nearly matching the percentage who feared recession in late 2022 and early 2023. This 2nd Quarter poll drastically changed from the 1st Quarter, and will affect insider buying and selling statistics if the sentiment doesn’t change.
The Federal Reserve has continued its “wait and see” stance regarding rate policy, however the sentiment appears to changing as the negative economic news, and potentially lower inflation, may result in cuts beginning sometime in the summer. This month’s GDP reading of -0.3, however, also came in “lower than expected.” Though there are several factors attributed to this number, and should the global tariff issue persist, the GDP could face a larger reduction, as manufacturing and production would decline further, indicating a recession and a potential rate cut sooner than later.
The overall markets/indexes have been climbing since that April 8 low, and now appear to be consolidating, as the DJIA and Nasdaq currently have over 50% of their holdings trading over their 200-day Moving Averages, while the S&P 500 is close at 48%. The Russell 2000 small cap index, however, continues to lag at only 32%, helping drag the overall average to 40%. This indicates that some negative sentiment persists despite the large rally since early April. Keep an eye on these numbers as momentum is starting to slow.
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). Also, short-term investors and traders should beware of any false rallies, as they occur often during bear markets, and the tariff 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.
