To The Moon

Market Outlook for the coming week

Fear & Greed Index overview as of 22 May 2022

Fear & Greed Index timeline as of 22 May 2022

The Fear & Greed Index is a way to gauge stock market movements and whether stocks are fairly priced. The theory is based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect.

The Fear & Greed Index is a compilation of seven different indicators that measure some aspects of stock market behavior. They are market momentum, stock price strength, stock price breadth, put and call options, junk bond demand, market volatility, and safe haven demand. The index tracks how much these individual indicators deviate from their averages compared to how much they normally diverge.The index gives each indicator equal weighting in calculating a score from 0 to 100, with 100 representing maximum greediness and 0 signalling maximum fear.

From the Fear & Greed index, the sentiment of "extreme fear" remains in the market. This is likely to continue in the coming week. Hopefully, we can find some relief in some good news and earnings.

1D chart of S&P 500 as of 22 May 2022

From the chart above, it is likely the market's decline to continue. This can drag out if this week's economic and earnings reports fail to uplift the market. While some are calling out for the drop to bottom soon, I am looking hard for reasons for the reversal. The Ukraine war drags on, Covid is seeing some resurgence in some places but it was not as worrisome as seen in the number of hospitalization cases. Inflation and unemployment data are proving to be tricky as the Federal Reserve walk the tightrope suspended between inflation and recession.

For now, I recommend prudence and setting aside "cash for crash". 

@TigerStars