INDICATOR INSIGHTS
Monthly Update
CATEGORY
Market Sentiment/Risk MO. END CHANGE LEVEL
Fear & Greed Index (Market sentiment) 64 +3 Greed
VIX (S&P 500 Volatility measure) 15.3 -3.3 Neutral
MMRI (Risk measured by interest rates) 257 -16 High risk
U.S. 10yr-bond yield 4.23 -.15 Decrease
Fear & Greed Bitcoin 39 -23 Fear
CSI (Consumer Sentiment) 58.6 -3.2 Decrease
U.S. Economy UP/DOWN LEVEL
LEI (Overall leading indicators) Slight Down Bearish *5 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 Down Bearish
Personal Consumption Expenditures Slight Up Inflationary
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 Bullish
Business Activity/CEO Confidence Up Bullish
**This section updated on August 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) Down Bearish
PCR (Put to Call Ratio – 5 day avg) Down slightly Bullish
ADL (Advance/Decline line) Up Bullish
MFI (Money Flow Index) Up Bullish
Institutional Trading Selling Bearish – but slowing
Commodities MO. END CHANGE LEVEL
Gold to Silver Ratio 86.6 -4.5 Neutral
Crude Oil 64.01 -5.18 Decrease
** 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 (SPY), 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 71 64 60 Increased
DJIA (Blue Chips) 80 73 77 Bullish
S&P 500 (Top 500) 68 63 65 Bullish
QQQ (Technology) 72 65 65 Bullish
IWM (Small Caps) 78 71 61 Bullish
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 July of 2025, we noted a solid 2.2% gain in the S&P 500 despite the sustained negative tone to many economic indicators. The month of July has been the 2nd most favorable month for the markets over the past few decades, and after some initial volatility, extended the rally from early April cycle lows. The month of August, which normally shows some seasonal weakness, ended up about 1.9%, a good sign going forward. Economic indicators were mixed throughout the month, causing the expectation of an interest rate cut to fluctuate, and caution should be exercised with new long positions for the next few weeks, leading up to the Fed meeting on September 16/17.
As we often mention, the Fear & Greed Index normally reacts quickly to extreme readings (below 25 or over 75). The reading spent most of August oscillating between the Neutral and Greed levels, ending at 64 (Lower Greed). Last month we suggested to look for a pullback should this gauge reach Extreme Greed, which it did not as markets remained rather calm and non-directional. Slight pullbacks did occur throughout the month, but were not significant.
“Readings of note” in the month of August included a positive change in the Index of Percentage Highs (reflected in the chart above). All four major indexes showed improvement, signaling some strength in the underlying conditions of the market, and less control by only the leading MAG7 stocks. This was reflected in the Advance/Decline line, and the Money Flow Indicator, as both resumed their upward direction. This is important as the market is less fragile, and less likely to suffer significant losses. The major indexes are now well above the 50% mark of stocks trading over their 200-day Moving Averages, while only the Nasdaq 100 has declined, which concentrates more on the leading companies. If (and when) those stocks recover, the whole market is poised to power forward.
The Federal Reserve staff has suddenly experienced some contention in the ranks regarding an interest rate cut in the near future, as Fed Chair Powell remains rather neutral regarding this matter. Despite continued weakness in the jobs and real estate markets, inflation numbers remain stubborn, putting him in a curious position. Though his remarks last week were slightly dovish (positive for a rate cut), the daily change in sentiment, and new economic reports, has caused market volatility and mostly non-directional price action. Again, any gains, or minimal loss, during this seasonally weak period, is positive for the intermediate outlook.
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), during this seasonal weak period. Also, short-term investors and traders should beware of any false rallies, as they occur often during volatile market conditions, and any expected interest rate policy stance changes.
***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.
