The Mars Market Update — Live Research

Last week, equities broke lower across the board as global rates continued to climb and pressure risk markets. The idea of higher rates for longer is putting pressure on long duration assets as investors continue to pare back positions given higher risk premia. The US$ strength continued into layered resistance as both industrial commodities and PM's remained under pressure. Global long rates are testing recent swing highs and are threatening to break out. Markets continue to anticipate more...

Equity markets continued to drift lower as rates rose and investors pared back risk in thin summer trading. The recent equity market decline appears corrective into initial support but we cannot discount the potential for a more bearish wave count. The US$ strength continued across the board as investors embraced the best house in a questionable street. Commodities continue to warn of a deteriorating global economic growth outlook as higher rates squeeze markets. Will higher rates break the...

Global equity markets declined last week for what we expect to be a 4th wave correction within an ongoing bull market trend. The building momentum divergence across the primary equity indices warned of a near term top that saw downside follow through last week. Rates pushed higher for a hard test of the primary swing highs before reversing lower after the weaker than expected NFP report on Friday. FX markets remain mixed and range bound as the global CB's chose different paths on this nascent...

Last week, equities continued to grind marginally higher as traders digested stronger growth, declining inflation and continued central bank rate rises. While the rally is extended and we are starting to see inter-market and momentum divergence there is no strong evidence of a tradable top. Bonds reversed sharply from resistance and sold off more than expected (especially the long end) while the US$ rallied following the strong US GDP data . We are starting to see a more divergent world as...

Last week, equities consolidated recent gains as investors began to rotate out of big tech and into the broader industrials. The DJIA is at a key inflection and has enough waves in place to potentially complete an "ending" diagonal or break up and out of its recent consolidation. The Russell 2000 is also testing the top end of its recent range for a bearish triangle consolidation. While there is no strong evidence of a tradable top, the equity market rally is extended and at risk of a 4th wave...

Last week's CPI came in not too hot, not too cold, but just right for this goldilocks market - the US$ broke sharply lower while equities, bonds and commodities rallied in the hope of a less interventionist Fed and potential soft landing. Equity markets are threatening to push towards new ATH's but small caps continue to lag the Nasdaq mega-caps as the growth outlook deteriorates. The DXY appears to be breaking down from its triangle wave B consolidation but needs to extend lower this week to...

Global equities continue to stall at resistance as global rates rallied across the board - the risk markets are attempting to price in higher rates for longer as global economies remain resilient with constrained labor markets. Equity markets appear to be forming a small degree wave (iv) correction within an ongoing impulsive rally. The alternative is a complex correction that is potentially complete for red W-X-Y (lower probability). The US$ and bonds (TLT) are threatening to break down from...

Last week, equities drifted lower from resistance but the declines are NOT yet clearly impulsive. Importantly, the Russell 2000 overlapped its proposed wave (i) high to invalidate the near term bull case and open the door to a more bearish reversal. The equity market rally is getting narrower with very few stocks dragging the primary indices higher - we are likely in the late stages of this bull market recovery. The Russell, RSP (S&P equal weight, DXY, TYX, TLT and Crude Oil all appear to...

Last week, risk assets rallied strongly following the Fed pause and expectation of a global slowing of rate rises and easing financial conditions. The benchmark SPX rallied strongly from its gap and go in what appears to be a 3rd wave. While we had been looking for evidence of trend exhaustion, this strong rally invalidated the near term 5th wave top potential. The DJIA continues to set up for a bullish break. The US$ also declined sharply across the board and invalidated our final 5th wave...

Last week, equities pushed marginally higher to potentially complete another small degree impulsive rally in the SPX and DJIA. The question is whether this is an ending wave (SPX) as we have been anticipating or just the start of a stronger 3rd wave rally (DJIA)? This week's FOMC will be key to a number of risk markets given near term inflection points. Equities have enough waves in place to complete red wave C of this proposed counter-trend rally; the DXY's rally appears incomplete and would...