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