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Post by Fearchar on Jun 18, 2022 0:16:24 GMT
I should add that my favorite indicator ICE BofA US High Yield Index Option-Adjusted Spread (BAMLH0A0HYM2), hit a new high as well: 5.17.
This is not the initiation of Buy logic, but does indicate a market extreme that has not been reached since March 2020. Ideally, I'd like to see BAMLH0A0HYM2 retreating from a high greater than 7. However, I don't believe we will find a shortage of liquidity this time around that has marked past peaks.
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Post by Fearchar on Jun 25, 2022 12:09:34 GMT
Overall Index: 28 "Fear"
Market Volatility: Neutral
Stock Price Strength: Fear Put/Call Options: Fear Stock Price Breadth: Fear
Safe Haven Demand: Extreme Fear Market Momentum: Extreme Fear Junk Bond Demand: Extreme Fear
Huge rally this past week: Yeah!
But was it just a head fake?
So, why did the market rally?
I really don't know.
I see that BBB bonds relaxed a touch, but mortgage rates gained. Jerome Powell testified that the FED is serious about inflation. So, no reason to suspect that interest rates will relax any time soon. There is still a huge disparity between job openings and people actually looking for work. So, fundamentals haven't really changed all that much.
S&P 500 earnings continued to grow. So, maybe that's a the good news? Many suppose that a recession is imminent, but so far it's not happening.
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Post by uncleharley on Jun 25, 2022 12:50:01 GMT
But was it just a head fake? So, why did the market rally? If one looks at the weekly chart for the S&P 500, the declines of recent weeks have been sharp and accelerating. Accelerating to the point of nearly going parabolic. Of course those charts cannot go back in time, only forward, consequently they had to rally for a week or two to make their decline more linear. Yes, lasr weeks rally was a technical head fake. Next weeks will be too. Then we should be back to reacting to a rising rate environment which can only result in a bear market. stockcharts.com/h-sc/ui?s=$SPX&p=W&b=3&g=0&id=p35308650206&a=524485138&listNum=86
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Post by Fearchar on Feb 4, 2023 1:57:58 GMT
Although I check the Fear & Greed index nearly every weekend, it's been a long time since I updated this thread.
Today the index hit 76, the highest reading since November 2021 when I recorded 85 on 11/5/21 and 83 on 11/19/21. Readings over 75 equate to extreme greed, but as indicated below this is not over all aspects:
Market Volatility: Neutral Junk Bond Demand: Neutral
Market Momentum: Greed
Stock Price Strength: Extreme Greed Stock Price Breadth: Extreme Greed Put/Call Options: Extreme Greed Safe Haven Demand: Extreme Greed
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Post by uncleharley on Feb 4, 2023 13:36:35 GMT
That looks like a sell signal to me.
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Post by Fearchar on Jul 22, 2023 12:49:48 GMT
Quick update on the F&G index. Current reading is 82 (extreme greed). Index has been in the extreme greed range for a while; over 75 since the end of June and over 80 for just over a week. So, not a timing signal, but rather a warning! Here's big picture of how the index has moved and the momentum factor:
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Post by steadyeddy on Jul 22, 2023 13:01:53 GMT
Quick update on the F&G index. Current reading is 82 (extreme greed). Index has been in the extreme greed range for a while; over 75 since the end of June and over 80 for just over a week. So, not a timing signal, but rather a warning! Here's big picture of how the index has moved and the momentum factor: View AttachmentI wonder how MM funds are doing. Are folks jumping into the stock market with both feet? I doubt it. I think exuberance is high within a narrow swath of investors, overall investors (particularly those that have money like baby boomers) are still very cautious.
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Post by Capital on Jul 22, 2023 14:11:37 GMT
Quick update on the F&G index. Current reading is 82 (extreme greed). Index has been in the extreme greed range for a while; over 75 since the end of June and over 80 for just over a week. So, not a timing signal, but rather a warning! Here's big picture of how the index has moved and the momentum factor: View AttachmentI wonder how MM funds are doing. Are folks jumping into the stock market with both feet? I doubt it. I think exuberance is high within a narrow swath of investors, overall investors (particularly those that have money like baby boomers) are still very cautious. Latest MM Fund balances
A Chart View from the FED
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Post by oldskeet on Jul 22, 2023 14:27:21 GMT
Yep, I agree not a timing signal but it does reflect the market is extended. Perhaps, we will get a consolidation or possibly a near term pullback.
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Post by Fearchar on Aug 18, 2023 11:20:37 GMT
oldskeet , was correct! The market has pulled back since last update. The latest Fear & Greed readings can be found here: www.cnn.com/markets/fear-and-greedOfficial overall reading is 45, which is Neutral. However, that value is bordering on Fear. Moreover, while Market Momentum and Price Strength are being scored as in the Greed range, the actual charts are falling fast, which to me is bearish and by extension indicative of "Fear". Market Momentum: Greed (but falling fast) Stock Price Strength: Greed (also falling fast) Stock Price Breadth: Neutral (falling fast too) Put/Call Options: Fear (shooting higher towards Extreme Fear) Market Volatility: Extreme Fear (uptick) Safe Haven Demand: Fear Junk Bond Demand: Extreme Greed What sticks out right now is Junk Bond Demand. That is the spread for junk bonds is very low right now. It's at the lowest sustained level for the past year (there have been only brief spikes that were lower).
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Post by Fearchar on Aug 18, 2023 11:30:09 GMT
The money market fund balance is a few weeks out of date. It was shooting higher at that time. In the past, it has tended to plateau during market bottoms. So, I suspect we have a ways to go... Historically, the market bottoms out at least 6 months after the FED's first cut. This time maybe uniquely different since the money supply is so robust.
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