The Mars Market Update — Live Research

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...

Equity markets extended their respective rallies late last week as investors embraced the NFP induced goldilocks rally where the economy seems not too hot, not too cold, but just right... OPEC+ extended production cuts over the weekend opening the door to a sharp Crude rally. The DXY and Euro are approaching equality targets while the Aussie$ appears to be hammering out a low. Rates remain range bound but are threatening to break out with two-way risks. Are commodities and commodity currencies...

Last week, US equities maintained bullish momentum after a hard test of our 50 day sma support highlighted over the last few weeks. The best case for the bears is a "sell the news" bearish reversal after this push to marginal new highs in the SPX and Nasdaq indices. The US$ extended its rally across the board but is nearing measured upside targets for what we expect to be an ending counter-trend rally. Rates continued to rise across the board with no evidence of trend exhaustion - rising rates...

Last week, equities pushed to marginal new highs as expected but the structure appears incomplete. The gap between leaders (Nasdaq) and laggers (Russell) continued as the Nasdaq indices extended recent gains to push through our initial upside targets. The Russell remains range bound near its cycle lows and is at risk of breaking down. The yield curve continues to shift higher as economic growth remains resilient and as Central Banks appear to be signalling an end to the rate rising cycle....

Equities have traded in a sideways consolidation for over a month now as investors search for direction. We do NOT have confirmation of a tradable top as markets have digested a slowing of the Fed hiking cycle, receding inflation and a moderately slowing economy. Commodities, commodity currencies and small caps are all warning of slowing economic conditions while rates continue to trade sideways (consolidating at high levels). The calm before the storm... stagflation and debt trap. Equity...

Key events this week – US CPI, US Senior Loan Officer Opinion Survey Q1, Debt limit negotiations, BoE policy decision Recap from last week According to the S&P PMIs, global growth momentum continued to improve going into Q2. Manufacturing remains stagnant while growth momentum has increasingly shifted to services and with it, firmer services-led price pressure. The persistence of services-led inflation and risks to financial stability were important themes across both data and central bank...

Last week, equities made marginal new highs before fading from overhead resistance and retesting support. Despite the negative banking news, equities held key support and rallied strongly on Friday. The question is whether or not the wave C rally is complete or would look best with a final push above the February highs? The Russell 2000 remains our "tell" for the bigger picture bear market and would still look best with a small degree wave (c) of 2 rally to complete its correction. The rally...

Last week, equities held corrective support and turned higher for what we expect to be a final wave (v) of C rally for the major indices (SPX, DJIA and Nasdaq). Completion of this final rally opens the door for the bigger picture bearish turn we had been awaiting- key inflection point for risk markets. The Russell continues to lag but would look best with a final wave (c) rally, opening the door to its bearish turn - our canary in the coalmine. Bonds remain range bound in the lead up to this...