The Mars Market Update — Live Research

Last week, equities turned sharply lower from resistance but were unable to sustain any break of near term support. The October lows remain intact. Friday's strong opex rally has called into question the bear case. The structure of equity indices, especially the Nasdaq and SPX, are starting to resemble a triangle compression, increasing the risk of an upside breakout. While the big picture structure remains bearish, there is a risk of a near term break-out rally if bears don't immediately...

Last week, risk assets rallied across the board as traders absorbed high but receding inflation and a weakening global economy. The market is front-running the goldilocks recovery and elusive soft landing. Hopium remains firmly entrenched. We are looking for a bearish reversal early this week to maintain our bearish outlook. Equity Markets - decision time Equities rallied strongly to tag upside targets highlighted in last week's update and now it's decision time... Bears need to make a stand...

Last week, equities traded sideways before a late week rally as risk markets digested the latest NFP report. The markets reacted positively to the data as the US$ declined while bonds and equities rallied (risk-on). This week will be important to see if there is any risk appetite to follow through. The near term bear count is invalidated above the wave 2 December highs. This week's CPI report will likely be critical for ongoing market sentiment... Equity Markets - setup pitch Our benchmark SPX...

From our previous update, "The decline from last week’s highs appears impulsive but would look best with a small degree iv and v to complete an impulsive wave (a) or (i) down". Global equity indices show an impulsive 5 waves down from recent swing highs across the board to set up the next bear market trend. Early this week should see a counter-trend rally for wave (b) or (ii) as we look for (c) or (iii) down into next week. The US$ is still searching for a low to complete wave A or 1 down...

Last week, equities pushed to marginal new highs before reversing sharply lower for an outside-week bear reversal. "It is the reaction to the news that matters". The complication is that the near term SPX / ES rally up off the October lows can be counted as both bullish (impulsive) and bearish (corrective). At these times it is best to stand back and focus on the bigger picture trend which remains bearish. The US$ and rates are attempting to hammer out a tradable low while the commodity...

Last week equities turned lower from our sell zone but the decline is not yet clearly impulsive. Bears need to see downside follow through this week and press lower to break near term support to help ensure an impulsive bearish reversal. Trade above last week's highs invalidates the bear case and opens the door to more bullish options. The US$ and rates appear to be bottoming and are likely setting up a near term counter-trend rally. Crude Oil broke lower as expected as we look for an end to...

Equities continue to climb the wall of worry since the October lows as markets bet on a less hawkish Fed going into year-end. Buoyed by declining rates and a weaker US$, equity bulls continue to press higher into layered resistance. While there are enough waves in place to complete this counter-trend rally, there is NO confirmation of a tradable top. We are awaiting evidence of a bearish reversal to confirm a tradable top. Equity Markets - looking for a turn (still) The SPX / ES continues to...

Did we get our Thanksgiving Top or is there one more marginal push higher? Equities edged higher as expected but are now approaching critical resistance for the bear case. Bears need to make a stand in this sell zone or risk getting run over. Markets are still expecting a slowdown in economic growth as evidenced by increased yield curve inversion, weakening industrial commodities, weaker US$ and strong long bonds. The market risk is a stronger economy, rising CPI and more hawkish signaling by...

Equity markets stalled below initial resistance last week as they digested the post-CPI rally. We do not have confirmation of a near term top as the potential remains for a final push higher in wave v of (c) towards secondary targets. We continue to count this rally as a correction within a bigger picture bear market decline. This week likely sets up a market top leading into the Thanksgiving holiday (holidays are "usually" positive for risk). The global macro environment should continue to...

Last week, equities rallied strongly after the weaker than expected CPI report. We had noted that bears needed to press early in the week to confirm an impulsive decline as the Nasdaq indices tested key support - the bears fumbled, key support held and the equity market short squeeze ripped higher. Forewarned is forearmed... "The Nasdaq indices in particular only show 3 waves down of equality into support and needs to break lower to help confirm the bigger picture bear case (reversal risk)....