The Mars Market Update — Live Research

Equity markets continue to hold long term trend support as shown in the charts below but the internal wave structures warn of significant downside risks if last week's lows break! So far, the Nasdaq and SPX have declined in a corrective 3 waves of equality from recent ATH's into last week's lows - a break of these lows opens the door to a much larger decline. Caveat emptor! The SPX / ES continues to hold trend support after 3 waves down of equality but last week's rally is at risk of failure....

Last week we warned about the potential for a wave (b) top and sharp reversal in equities. Equity markets did reverse impulsively lower and potentially sets the stage for a larger red wave (c) decline. Rising Rates continued to provide headwinds for long duration assets. Despite the risk-off environment, Crude Oil and RBOB continued to rally. The Nasdaq / NQ (bellweather) is approaching major support. So far, the decline is only in 3 waves of equality testing fib and long term trend channel...

Wishing everyone a safe and prosperous 2022! Over the next few weeks, I will be formulating our "Year ahead" big picture outlook for 2022 - stay tuned... Global markets rallied into year end as expected as the primary bull market remains intact. The SPX / ES, our primary risk indicator, closed the year at new ATH's as wave 5 of (5) progresses into the new year. So far, we only have 3 waves up of equality from the December lows. The question is whether the rally is in the middle of an...

Wishing everyone a happy holiday season and all the best for the new year. Given the holidays next weekend, our next MCP Market Update will be posted in the new year 🙂 Markets whipsawed last week as they failed to break-out to new ATH's despite the bullish Santa rally setup. The US$ remained well bid and bonds traded sideways. Industrial commodities continue to lag as global growth slows and CB's tighten policy. The SPX / ES rejected ATH's late in the week but no real damage has been done to...

From last week's update... "Prima facie, the trend still appears bullish with impulsive rallies and corrective declines but two-way risks are significant given where we are in the cycle." - the bears fumbled and the bulls ran. The door is open for a santa rally into year-end if the bulls can sustain a breakout here. Market leaders continue to lead and look bullish while small caps are warning of downside risks. Mixed markets continue with two-way risks. Tread lighly (protect capital) as this...

Last week, global equities continued to decline as expected BUT the structure of the decline for the major indices remains mixed. While the decline from ATH's in the DJIA and Russell 2000 appear impulsive, the decline in the SPX and Nasdaq is more overlapping and less clear. Rates, flattening yield curves, industrial commodities and commodity currencies are all warning of a slowing global economy and less CB intervention. Extreme bullish sentiment is concerning as the herd continues to buy the...

Last week saw a sharp decline in risk assets across the board after completing its latest impulsive 5 wave rally. Friday's sharp decline was preceded by a clear warning of an impulsive 5 waves down from the ES and NQ marginal new ATH's as tweeted (nice bearish setup). Markets rarely top on bad news (Omicron variant) and so far, the decline in risk assets is only in 3 waves. Need 5 waves down to confirm a bigger picture change in trend. PS: The COT data will be added once released this week....

Last week saw growing intermarket divergence as the Nasdaq and SPX pushed to new ATH's while the DJIA and Russell faded badly. Risk remains favoured while long rates are contained despite (and maybe because of) the US$ continuing its strong bullish break-out. Industrial commodities and commodity currencies are rolling over as the flattening yield curve indicates more tightening and slower growth ahead. The SPX / ES pushed to marginal new ATH's in what appears to be an ending 5th wave for the...

From a big picture perspective we are approaching a major long term top. How far can the bulls run? How long can this cycle extend? The key to reversing this trend is long rates - rising long rates that force the global CB's to finally end the QE experiment. Only then will the financialization of the world end. SPX Monthly semi-log The SPX / ES and other global equity markets remain within bullish trends that are likely to extend into year-end. The question is whether this latest impulsive...

Last week the Russell 2000 and DJIA finally broke out of congestion to new ATH's confirming our view of "unresolved upside". Global equities rallied strongly across the board (except for Emerging Markets) supported by a dovish Fed and lower rates. This is a seasonally strong period for the markets with the expected Santa Claus rally leading into year end. It is important to remember that this latest rally is likely an ending wave of multiple degree for global equities. With minimum conditions...