The Mars Market Update — Live Research

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...

Global equity markets remain within 4th wave corrections. This choppy price action is illustrative of the bulls and bears fighting it out at the end of a trend - we need to keep perspective on where we are in the bigger picture trend - an ending wave. While macro tailwinds (reflation) become headwinds (stagflation) for the equity markets, hope springs eternal as traders try to ride this bull until the end. DJIA QTR Equity Markets: Likely 4th wave and no impulsive decline So far, our benchmark...

Equities broke lower early last week to tag our measured targets and test our bigger picture support zone. Our base case for the SPX / ES remains unchanged - that is, this latest decline is expected to be a wave 4 correction prior to a final wave 5 of (5) to new ATH's. While our preference is to see another early sell-off this week to marginal new lows to complete wave (v) of (c) of 4, it is not required. Given that our downside targets have been met, we should allow for the possibility that...

Equity markets broke lower across the board last week as warned. Importantly, the primary equity indices tagged initial downside targets for a "corrective" decline. However, if our primary count of an expanded flat (3-3-5) is correct, this latest decline should extend lower into 5 waves for red wave (c). While we are open to more bearish outcomes, our analysis is based on the irregular (incomplete) 3 wave tops formed in the SPX and DJIA. In the meantime, these are nasty trend breaks... This is...