The Mars Market Update — Live Research

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...

Global equities extended rallies last week despite rising short rates and a flattening yield curve. We are still waiting for the DJIA and Russell 2000 to confirm 5 waves up by breaking out of this congestion. This week, we are looking for a potential end to the rallies in commodity currencies while Crude Oil and Gasoline appear to be topping in 5th waves despite (and probably because of) bullish extremes. All eyes are on the Fed this week to confirm its hawkish / dovish outlook given the rise...

Last week the equity markets cleared our near term inflection point and rallied directly to test ATH's. While we continue to look for new wave 5 highs for this cycle, we are still not convinced that this immediate rally is sustainable. No index has clearly broken out with the Nasdaq clearly lagging. The DXY remains stalled below resistance while commodities continue extend higher in 5th waves. Importantly, all equity markets would look best with a clear wave 5 to new ATH's to help complete...

Last week saw a strong recovery from equities after a corrective 3 waves down from the ATH's as posted and tweeted. We are now at a near term inflection point for the broader market structure. Our base case remains that this decline is all or part of a corrective 4th wave with new ATH's required for a final 5th wave from the March 2020 lows. Commodities continue to rally while the yield curve flattens globally, reflecting our long term view of stagflation. It is difficult to see equities...

The bulls retain the ball but risks are rising! From a big picture perspective most global equities would look best with a final 5th wave to new ATH's to complete the rally from the 2009 major wave IV lows. For perspective, we are looking to complete 5 waves up of multiple degrees. While we have no confirmation of a bearish major reversal yet, what if we're wrong and the market has already topped? It would be prudent to buy cheap insurance to cover the bear case. SPX Monthly semi-log The ES /...

Last week we saw a continued selloff in equities as markets digest the potential for an ongoing stagflationary environment. The ES and NQ made marginal new cycle lows before reversing sharply higher on Friday. The rally on Friday is only in 3 waves so far and needs to extend higher in 5 waves on Monday to help confirm a near term change in trend. The US$ continued to impulse higher, breaking through overhead resistance while bonds traded sideways. Crude Oil continues to press overhead...

Last week saw equities decline sharply in 3 waves on a technical break of support before rallying for the remainder of the week. It now appears that we have a corrective 3 waves down from ATH's and an impulsive rally up off the lows. The question is whether this latest rally is part of a larger correction or the start of another impulsive rally through new ATH's? This latest rally calls into question the potential for a larger degree 4th wave - either way, the bigger picture bullish bias...