The Mars Market Update — Live Research

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...

Global equities rebounded last week after holding near term wave (v) or 5 support. The big picture market structure remains bearish as our expectation is that January's ATH completed the supercycle rally from the 2009 lows. Minimum targets for this bear market decline is the March 2020 lows - buyer beware as this is no longer a bull market. From last week's update "Bulls need to make a stand early this week or risk an accelerated decline. Just be aware that “if” this decline is an ending...

The bear market trend was finally confirmed last week with 5 waves down from recent supercycle ATH's. This latest decline confirms our view that the bigger picture market trend is now bearish. Global CB's have reversed course and started tightening aggressively to fight inflation (rising prices are now a political problem) - global macro trends are bearish for risk assets so buyer beware... SPX Monthly semi-log The SPX / ES broke sharply lower last week to help confirm the bigger picture...

Global equities reversed sharply lower last week after failing at overhead resistance. Most major indices are now retesting major swing lows and threatening to break down in wave 5 or a more bearish red wave (iii) of 3 (more akin to a crash). ANY new swing low invalidates the big picture bull case (corrective 3 waves down) and confirms the bigger picture bear market trend. Given the corrective rally up from recent swing lows, bears remain in control until proven otherwise. Rising inflation,...