Mars Market Update: April 6th, 2026 – Uncertainty Remains

by Mofar2016 | Apr 6, 2026

Last week, equities rebounded strongly as Trump looks to TACO his way out of the Iran conflict. The decline in the SPX, DJIA and Russell all appear impulsive for wave A or 1 down. This initial rebound appears to be part of a larger degree counter-trend rally that potentially sets up the next decline in wave 3 or C down. Ideally, we’d like to see a 3 wave corrective rally that reverses from 61.8% fib and 50 day sma trend resistance. The structure of the Nasdaq decline is not clearly impulsive and may be warning of underlying market strength. The uncertainty remains extremely high. “The longer this Iran conflict remains unresolved, the greater the risk of stagflationary headwinds of higher rates and energy prices.”.

Bond markets rebounded from trend support but remain trapped within big picture triangle consolidations. The US$ / DXY extended marginally higher into overhead resistance unconfirmed by new lows in the Euro. The rally up off the major lows is impulsive and while it may see a near term pullback, it remains bullish from a big picture perspective. Commodities remain mixed as energy markets test recent highs while the metals rally appears corrective – this behaviour reflects the stagflationary fears for the global economy the longer this conflict persists.

Equity Markets – Counter-Trend Rally?

Last week, the benchmark SPX / ES rebounded from fib support for what is likely wave (a) up of a counter-trend rally. The structure of the decline appears to be a leading diagonal decline for wave A or 1 down that potentially sets up a strong decline once this counter-trend rally completes. Overhead resistance remains at the 50 day sma and 61.8% fib retracement in the 6780-6800 area. Our continued caution remains warranted given the extended nature of the 2026 decline.

What if we’re wrong and the latest SPX / ES decline completed wave (c) of 4 with a final wave 5 to new ATH’s now on deck? While lower probability (and not our base case), we should be aware of the potential if Trump is successful and the Hormuz Straight clears. We should be aware that any push to marginal new highs is likely an ending wave.

The Nasdaq / NQ failed to see downside follow through last week and rebounded through overhead resistance in the 24000 area. The decline appears corrective and needs to extend lower in 5 waves to help confirm a bigger picture decline. The bullish alternate is a completed wave 4 corrective decline that sets up a final wave 5 of (5) rally. Overhead trend resistance remains at the 50 day sma as two-way risks remain. Low confidence outlook given what appears to be a complex correction while last week’s lows hold.

The DJIA / YM rebounded from support in the 45000 area after what appears to be an impulsive decline signaling the start of a larger degree bear trend. Ideally, we’d like to see a 3 wave counter-trend rally that tests resistance in the 48300-500 area of the 50 day sma and 61.8% fib. A counter-trend rally likely sets up the next wave 3 or C decline through overlap support in the 45000 area.

The Russell 2000 / RTY continued to stair step lower and has enough waves in place to complete 5 down. While the structure of the decline is not ideal, the recent rally is likely only wave (a) up of a counter-trend rally. Overhead resistance remains in the 2600 area from where the bears would need to make a stand. Bears need to break the 200 day sma and secondary support in the 2300 area to help confirm a larger degree decline.

The VIX / VX remains range bound with another failed test of trend channel resistance. The equity bulls retain the potential for new highs while the VIX remains contained. A break above the wave (c) highs would warn of an accelerated decline in equity markets so buyer beware. Trump needs to end this Iran conflict or risk the consequences.

Bond Markets – Testing Support

To the bond markets and the TLT rebounded from equality support to remain range bound from a big picture perspective. Bulls need to hold trend support in the 84-85 area or risk a strong red wave 3 of (5) decline. Importantly, bonds remain range bound within big picture triangle consolidations and any push to new swing lows is likely an ENDING wave. Near term inflection as bonds test support.

The US30yr / ZB rebounded from key trend support in the 112 area but the rally is not yet clearly impulsive. It remains range bound within a big picture triangle consolidation and support is support until broken. A break of trend support opens the door to a stronger wave (iii) decline and at least a hard test of major swing lows (or lower). Bulls need to hold the line here.

The US10yr / TY rebounded last week but remains short of measured targets and support in the 109 area. Bulls need to hold this trend support or risk an accelerated decline towards the 2023 lows. Bonds remain range bound within this triangle consolidation as the range racing continues. Two-way risks and range compression leads to expansion…

FX Markets – DXY Inflection

To the FX markets and the DXY pushed to marginal new highs and is testing resistance in the 100.35 area. While this rally can continue to extend immediately higher, the risk is a correction lower for wave 2 down. Support for the bullish trend remains lower in the 97.50-98.30 area of the 50 / 200 day sma and fib support. While we could see a near term correction lower, the bigger picture outlook remains bullish while the 95.36 swing lows hold.

The Euro failed to confirm the DXY marginal new highs and remains range bound near term. The question is whether the Euro has completed its initial 5 wave decline or needs a final wave lower to complete. Strong support remains in the 1.14 area as we look for a corrective wave 2 rally to develop towards overhead resistance in the 1.1700-30 area. The outlook for the Euro remains bearish as we look for a resumption of the big picture bear trend.

The USDJPY pushed marginally higher last week but remains below key resistance in the 162 area. We do not have confirmation of a tradable top or bear reversal as bulls and bears fight it out. Bears need to reverse this rally and break this series of higher highs and higher lows to help confirm a bearish change in trend. We remain bearish against the 162 highs as we look for a large red wave (C) decline towards measured targets in the 138-140 area. Trade above 162 invalidates the bear case. 

The Aussie$ extended lower last week as expected after potentially completing a corrective 3 wave rally from the 2025 lows. Bears need to extend this decline through overlap support in the 0.67 area to help confirm a more bearish outlook. Bulls need to hold this overlap support in the 0.67 area and extend higher above 0.72 resistance to help confirm a bigger picture bullish outlook. 

Commodity Markets – CL Inflection

To the commodity markets and Crude Oil is testing recent swing highs at a key inflection. The big picture rally appears incomplete but near term risks a sharp bear reversal for wave (c) down. The extreme volatility and uncertainty is resulting in impulsive rallies and declines opening the door to two-way risk. Bears need to reverse this rally back below the 102.44 overlap to help confirm a counter-trend rally. Bulls need to hold this overlap support to extend higher in a final green wave (v) rally. Either way, the risk remains for a continued rally to new ATH’s consistent with our long term outlook.

RBOB has enough waves in place to complete an initial impulsive 5 wave rally with the near term risk of a corrective decline. While it could extend immediately higher, the risk is a wave (c) of 2 decline in line with the CL bear case. Strong support remains lower in the 2.50 area of the 50 day sma. Near term downside risk within a bigger picture bullish outlook.

To the PM’s and Gold rebounded higher last week but the rally appears corrective. While there are enough waves in place to complete a W-X-Y wave (4) decline of equality into the 200 day sma and equality support, the corrective rally warns of further downside risk. It is unclear whether the wave (4) corrective decline is complete or becomes more complex with layered support in the 3900-4200 area. 

Silver rebounded last week but the rally appears corrective. The decline appears incomplete and would still look best with a wave (v) of C down towards the 200 day sma (at a minimum). Equality targets remain lower towards the 38-50 area while trade back above the 77.75 wave (i) overlap opens the door to a more complex correction. The big picture decline appears incomplete.

Dr Copper continues to hold 200 day sma support but the rally appears corrective and the decline incomplete. It would still look best with a red wave (v) decline to marginal new lows. The bulls would need to see a strong rally higher in an impulsive 5 waves up to invalidate the bear case.

Crypto Markets – Holding Support

To the crypto markets and Bitcoin continues to hold trend channel support after a corrective 3 waves down so far. Bulls need to hold the line here and break back above 50 day sma resistance for a more complex and larger wave C rally. The risk remains for a downside extension while below the 50 day sma resistance (bear case). We remain bearish from a big picture perspective while allowing for a near term counter-trend rally for wave (B) towards the 200 day sma.

That’s all for now. Have a great week and trade safe. 🙂

MCP Market Update: March 31st, 2025 – Bear Reversal Testing Support

by Mofar2016 | Mar 31, 2025

Last week, equities extended higher as expected in a counter-trend rally into overhead resistance before reversing sharply lower. The question is whether the rally was “all” or “part” of a wave B counter-trend rally. The impulsive nature of Friday’s decline warns of an immediate red wave C decline towards big picture targets. The alternate is a more complex green wave B if bulls can hold recent swing low support. The equity markets remain bearish from a big picture perspective until proven otherwise.

Rates and the US$ are attempting to reverse lower to help confirm our bearish outlook as this risk off environment takes hold. The shorter end of the bond market in particular appears bullish as we look for a 5th wave extension higher. The Euro held key support and is attempting to reverse higher to help maintain our bullish outlook. Gold pushed to new ATH’s as expected but the rally is very extended as we look for evidence of a tradable top. Trump’s tariffs continue to weigh on markets as the economic outlook remains uncertain.

Equity Markets – Bear reversal

To the equity markets and the benchmark SPX / ES extended higher for a counter-trend wave (c) rally before reversing sharply lower as expected. The impulsive nature of last week’s decline warns that red wave B is complete and a strong wave C decline is underway. The alternate is a more complex green wave B counter-trend rally if bulls can hold recent swing low support. Either way, the recent counter-trend rally helped confirm our bigger picture bearish outlook with wave (4) targets lower towards the 5150 area. Bearish now or bearish later…

ES traders flipped net short.

The Nasdaq / NQ also extended higher in a counter-trend rally before reversing sharply lower. While there are enough waves in place to complete red B, bears need to break recent swing lows and continue its impulsive decline to help confirm wave C down. The alternate is a more complex green wave B counter-trend rally if bulls can hold near term support. Either way, the bigger picture trend remains bearish until proven otherwise as we look for wave (4) down towards targets in the 17250 area.

The Russell 2000 / RTY reversed sharply lower while below key overhead resistance as expected. The question is whether the rally completed green wave (a) or “all” of red 4 with wave 5 down on deck. The structure remains bearish while below the wave 1 overlap in the 2172 area as we look for confirmation of a bigger picture bearish decline.

The VIX reversed sharply higher from 200 day sma support but it remains range bound from a big picture perspective. This consolidation is consistent with a bigger picture wave (4) correction in the equity markets. No edge here as the range racing continues and Trump threatens a trade war. The response in the VIX has been muted so far.

Bond Markets – Breaking higher?

To the bond markets and the TLT declined in 3 waves of equality before reversing higher late last week. The TLT is likely trapped within a big picture triangle but bulls need to clear overhead resistance at the 200 day sma to help confirm more bullish potential. It remains range bound within a big picture consolidation until proven otherwise.

The 30yr / ZB only shows 3 waves up and 3 waves down so far but has the potential for a break higher in wave C of (C). Bulls need to clear 200 day sma resistance to open the door to a larger rally. Likely limited upside given the corrective nature of the initial rally within a big picture triangle.

Bulls and bears are exiting long bonds en mass.

The US10yr / TY held overlap support and rallied strongly late last week to help set up a 5th wave rally. Bulls need to clear 112 overhead resistance to open the door to a bigger picture wave (C) higher. We continue to see this rally as part of a larger degree correction. Despite being range bound, the outlook remains higher for a bigger picture wave (C) rally.

The US5yr / FV also held our near term support and rallied strongly late last week. Bulls need to clear overhead 118’20 resistance to help confirm 5 waves up from the lows and open the door to a bigger picture wave (C) rally. Bonds remain range bound from a big picture perspective with upside potential in the 112 area.

Both rates and the US$ would look better with downside extensions to keep the bear trends intact.

FX Markets – DXY turning lower?

To the FX markets and the DXY is attempting to turn lower for what we expect to be part of a bearish wave (C) decline. The structure remains bearish while below the key 106 wave (i) overlap. Ideally, we’d like to see a downside continuation this week to help maintain the bear trend with bigger picture targets in the 95 area.

The Euro held near term support at the 200 day sma and is attempting to rally up off these lows. The near term rally is not yet clearly impulsive and needs to clear 1.0950 resistance to help confirm our bullish outlook. Bulls need to hold the line here. Trade back below the 1.0533 wave (i) overlap invalidates the bull case.

Euro traders have flipped net long.

The USDJPY reversed sharply lower from the 50 / 200 day sma resistance but the decline appears corrective. While the potential remains for an extension lower towards trend support in the 144-145 area, there is no clear directional trend. Best to avoid until we see a clearly impulsive trend develop – range racing with no edge.

The USDSEK is fast approaching big picture support in the 9.73 area. The decline from the 2022 highs appears to be a 3-3-5 “Flat” correction within a larger bull trend. Ideally, we’d like to see a 5 wave decline that terminates in the 9.73 area before evidence of a bullish reversal. Given the bearish outlook for the US$ across the board, it’s best to await evidence of a bullish reversal before considering longs. Critical overlap support remains lower towards the 9.32 area.

Commodity Markets – Gold new ATH’s

To the commodity markets and Gold pushed to new ATH’s in what appears to be a 5th wave blow-off top. While there are enough waves to complete wave (v) of 5 of (3) up, there is no evidence yet of a tradable top. Bears need to break the series of higher highs and higher lows to help confirm a change in trend. Too early to call.

Silver is testing major swing highs as we look for a final wave 5 rally. There is no evidence of a tradable top as it continues to wedge into the highs. We are wary that this latest rally is potentially an ending wave so buyer beware as it pushes to new cycle highs. The fake-out new ATH’s in Copper is a warning to all.

Silver bulls pressing into the highs.

Dr Copper pushed to new ATH’s but reversed sharply lower as warned. Bears need to see downside follow through this week to help confirm a potential top. An impulsive decline that breaks overlap support in the 4.83 area would be the first indication of a potential change in trend. Trade above last week’s highs likely sees a 5th wave extension higher. Near term inflection.

Crude Oil continues to hold shelf support but would still look best with a final push lower to potentially complete wave 5 of (C) down. The alternate continues to be a triangle wave (B) consolidation if bulls can break up from this support. Two-way risks remain with major support in the 62-64 area.

Crypto Markets – Counter-trend rally

To the crypto markets and the Bitcoin rally appears corrective and reversed lower from near term trend resistance. A break back below 74400-75000 support opens the door to a much larger decline. Near term inflection as it remains trapped between near term support and resistance. The risk is that the long term rally is complete.

That’s all for now. Have a great week and trade safe 🙂