The Mars Market Update — Live Research

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...

US equity markets continue to stall at resistance with no strong evidence of a bearish reversal. While resistance is resistance until proven otherwise, the benchmark SPX would still look best with a final wave (iv) and (v) push to new swing highs to complete blue wave C (preferred count). This would align with another wave (iv) and (v) higher for the Nasdaq indices and final wave (b) and (c) higher for the Russell. These final subdivisions should set up intermediate market tops for the US...

Risk assets continue to squeeze higher as inflation pressures ease and growth stabilises. We continue to see this equity market rally as an ending wave prior to the resumption of the big picture bear market. We expect growth and inflation risks to be overwhelmed by increasing default and credit risk in this over-levered financialised world. Equity Markets - Extend and pretend Our benchmark SPX / ES continues to squeeze higher for what we expect to be a wave (c) or C rally. There are now enough...

Last week, equities stalled at near term resistance but there is no strong evidence of a bearish reversal. The benchmark SPX continues to retest its February highs while the Russell 2000 tests its major swing lows - a bifurcated equity market (weak growth vs rate risks). The DXY weakness continued but the US$ decline was NOT broad-based. Commodity currencies and the Yen underperformed - another bifurcated market. Bonds stalled at resistance (again) while Commodities are threatening to break...