The Mars Market Update — Live Research

Global equity markets continued to stair step lower last week as global rates rose and the US$ strengthened. Commodities rebounded last week for what are likely to be ending wave (c) counter-trend rallies. The key macro themes of rising inflation, global central bank tightening, slowing global growth and geopolitical risks continue unabated. The markets are fragmented: the Nasdaq and Russell are the most bearish and under pressure with impulsive declines from ATH's; the DJIA appears more...

Last week, the bears stepped up where they needed to as equities turned lower and met the minimum conditions for a wave (iii) or (c) decline. So far, the recent equity market decline is in 3 waves and Bears need to extend this into 5 waves down to help confirm a bigger picture change in trend. (too early to call). The risk-off sentiment was compounded by the global bond market selloff and US$ strength across the board leading to a bearish reversal in commodity currencies. Risk assets remain...

Equity markets have rallied in 3 waves into measured upside targets before reversing sharply lower late last week. Bears need to make a stand here or risk an ongoing bull market trend. The DXY trend remains bullish as we look for evidence of a bullish reversal in bonds. Commodities remain under pressure following likely completion of their respective blow-off tops. Futures traders aren't buying this equity market rally. The short end of the yield curve continues to break higher, flattening the...

Last week, global equities extended gains despite a continued sell-off in the bond markets. Bulls and bears are facing a decision with only 3 waves up from recent swing lows into layered resistance. Global risk markets are trying to digest strong inflationary headwinds, a resilient economy, strongly rising rates and global central bank tightening. The bond markets are warning that the Fed will need to raise rates aggressively. Can risk assets withstand rising rates and flat yield curve? The...

Equity markets rebounded strongly last week after failing to make new cycle lows culminating in a bullish weekly reversal. Only the Nasdaq indices made marginal new lows, unconfirmed by the broader indices, sparking a strong short covering rally from the double bottom. Crude Oil and RBOB extended declines into impulsive 5 waves (change in trend) while the US$ corrected lower in 3 waves of equality. This is an important week for the bigger picture market outlook. As tweeted late last week,...

Last week saw a sharp reversal (blow-off top) in energy markets as we counted out what we expect to be a completed wave 5 rallly for (1) or (A). Equity markets traded mostly sideways in what was likely wave (iv) and would still look better with a final wave (v) thrust to new cycle lows. Rates rose sharply last week despite escalating geopolitical risks - with the Fed no longer purchasing bonds under QE, the last price inelastic marginal buyer of bonds has gone. Who will buy Treasuries in this...

The stagflation outlook we discussed back in January 2021 seems to be playing out and has now become market expectation. Commodity prices are breaking out exponentially in what is more likely to be a blow-off top. While warnings abound, global equity markets have not yet confirmed a bigger picture change in trend. Importantly, our strategy remains capital preservation and risk aversion in these highly uncertain times at the end of a speculative mania. Despite all the bearish headlines, the US...

Last week saw wild swings in the markets as Russia launched an invasion on Ukraine. We have been warning of two-way risks in this market with "headline risks" as NEWS has become the signal. Bulls and bears continue to fight it out at the END of a primary trend. Putin is playing poker with the West, calling its bluff and seemingly willing to go all-in to do so. The West is threatening increasingly severe financial sanctions to add fuel to the fire. This is why our preferred position in 2022...

Global markets remain uncertain and difficult to trade with ongoing headline risk. Our base case remains that global equity indices are in larger degree 4th wave corrections prior to a FINAL wave 5 of (5) to new ATH's. The downside risk is that wave 5 of (5) of V is actually complete and the market is starting a waterfall decline of multiple degrees (lower probability). This is not a time for complacency for bulls or bears. The SPX / ES continues to trade sideways to down in an expected wave 4...

Friday saw a spike in volatility as markets feared rising geopolitical risks in the Ukraine. Crude and Gold spiked higher while equities sold off... Macro tailwinds have turned into headwinds for equity markets, making this a very difficult trading environment - risks abound. Equity market volatility continued last week as bulls and bears continue to fight it out in the face of rising rates and geopoltiical risks. The SPX, Nasdaq and Russell all failed their respective retests of key...