The Mars Market Update — Live Research

Last week, equities turned lower from highlighted fib resistance following the hotter than expected CPI report. It all comes back to the Fed - as CPI remains elevated, the Fed will keep raising rates to constrain the long end of the curve in a highly indebted world. Markets had been "hoping" for a moderating CPI so the Fed would pull back from its aggressive tightening regime. Traders are underestimating market risks here - the Fed will continue to tighten until the market breaks... only then...

Equity markets rebounded strongly late last week as expected after completing what appears to be an impulsive decline for wave (i) or (a) down. Bears need to make a stand this week to reverse last week's gains and press for a sharp decline in wave (iii) or (c) down. Unfortunately, the recent decline is not clearly impulsive calling into question the immediate bear case and opening the door for the bullish green wave C rally. Near term inflection point with CPI on deck. Markets are warning of a...

Last week, equity markets confirmed our bearish outlook with what appears to be an impulsive decline from recent swing highs. We correctly identified the previous rally as an (a)-(b)-(c) correction within an ongoing bear market. Risk remains to the downside as previous macro tailwinds (Fed liquidity) turn into headwinds (Fed tightening) amidst a global stagflationary environment. Historically high debt levels coupled with rising rates and rising consumer prices (including energy) will likely...

Global Central Banks have been very clear - their primary focus is to reign in inflation by raising rates and signal future rate expectations. Powell has set the scene for restrictive monetary policy in a 180 degree turn from the last 20 years. Tightening financial conditions in a highly leveraged world are negative for risk assets. The US$ may be entering a final 5th wave blowoff top so buyer beware... Last week, equity markets extended their declines from overhead resistance as expected,...

Last week, the SPX / ES tagged our upside targets in the 200 day sma and 61.8% fib retracement area as per our last update. There are enough waves in place to complete (v) of an extended wave (c) from where bears need to make a stand. The SPX / ES tagged the 200 day sma before reversing lower late last week - so far, the decline is only in 3 waves down of equality and needs to extend lower in 5 waves to help confirm a bigger picture change in trend. However, it must be noted the extreme short...

NB: Unfortunately, I will be taking leave for the next two weeks as I undergo a hip operation. Apologies in advance for the inconvenience but I'll be back on deck as soon as practical. Equities broke unexpectedly higher last week to invalidate our near term bear count. The ES COT data had warned of overloaded shorts into the hole and the potential for a short squeeze. The current narrative is one of economic weakness and a Fed pivot. I don't subscribe to this outlook. The US$ reversed lower...

Equities rallied last week for what we expect to be wave (c) of a corrective advance. There are enough waves in place to complete this near term counter-trend rally and the onus is on the bears to make a stand here. The question is whether this rally completed all of red uber bear (ii) or green wave A of a more complex wave (2) correction. The market believes the Fed will be successful at reducing inflation and ultimately return to a rate cutting cycle - we don't agree with this linear...

Last week, equity markets confirmed our outlook for a corrective rally within a bigger picture downtrend. Equities declined into anticipated wave (b) support before rebounding sharply late in the week for what we expect to be wave (c) higher - It's just a matter of degree. Equities held support despite bearish inflation reports and hawkish global CB policy. The DXY may be forming a blow-off top so buyer beware given extreme bullish sentiment and bearish momentum divergence. Global central...

Equity markets remain in big picture bear markets but traded sidways to up last week for what is likely to be a wave (ii) or 2 corrective rally. It continues to be a question of degree but let's not lose sight of the big picture. Only the Nasdaq has broken out of its declining wedge. The US$ broke to new highs as the Euro broke long term shelf support. Bonds faded at resistance while Crude Oil held near term support amid ongoing geopolitical risks. Our base case for global equity markets...

... time for the bulls to make a stand. Equity markets reversed lower from resistance early last week confirming another corrective rally. The near term risk is a hard test of recent swing lows led by the Nasdaq indices. Bulls need to make a stand and break up and out of the wedge to help confirm the wave (1) wedge lows or risk a continued decline. Importantly, we are yet to see evidence of equity market capitulation (Elliott Wavers refer to a 3rd wave "point of recognition"). While most...