The Mars Market Update — Live Research

The global bull market continues to extend higher as global rates and the US$ remain range bound. Commodity markets remain in a topping process and likely nearing the end of their initial impulsive rally from the 2020 lows. The Russell 2000 held bullish near term support opening the door for a continued impulsive rally. We continue to see corrective declines and impulsive rallies keeping the primary bullish equity trends intact. The Russell 2000 / RTY declined in a corrective 3 waves of...

Last week started with a strong bullish reversal in equities after a corrective 3 waves down (as tweeted on Monday) that extended higher throughout the week. The ES and NQ pushed to new ATH's while the RTY and YM are threatening to break higher. The Russell 2000 / RTY continues to show the clearest structure as it once again tests the top of its range - can it finally breakout or will resistance hold? Importantly, the US$ and bond markets faded following the Fed's flip-flop, providing near...

Last week, the Fed signalled a slight change in policy, sparking a reversal in risk assets led by curve flattening. We saw the US$ spike higher out of congestion, equities fall from resistance and PM's reverse lower. The charts warned of a risk reversal and the Fed delivered on cue. Near term bears need to see downside impulsive follow through to help confirm a change in the near term trend of risk assets. There are sixteen Fed speakers on deck this week! Will they be talking down the change...

Global risk assets continue to grind higher with no evidence of a tradable top. The ES / SPX appears to be completing 5 waves up from the March lows into marginal new ATH's. The bulls remain in control until we see evidence of a bearish reversal. The Russell 2000 / RTY and Nasdaq Indices are now testing ATH's as we approach a near term inflection point. Commodity currencies would still look best with a strong 5th wave higher while the near term DXY and Euro count is unclear. With the FOMC on...

The key macro themes driving risk markets higher are the weak US$, stable rates and goldilocks economy (not too hot, not too cold). Friday's NFP gave bulls an excuse to drive risk assets higher as the US$ fell and bonds rallied. The question is whether we stall out here or see follow through upside to break upside resistance? Equity markets continue to press higher with no evidence of a tradable top. Commodities remain supported by a weaker US$, supply side disruptions and a rebounding...

Last week, equity bears failed to make a stand as risk markets pressed higher. The Russell 2000 remains in the latter stages of a wave 4 bullish triangle / pennant. The Russell remains our clearest wave structure as the large caps continue to lag. The DXY attempted a bullish reversal from its wedge lows but the rally faded on Friday. The Euro broke lower from its ending diagonal but needs downside follow through to help confirm a change in trend. Bonds remain range bound but risks remain to...

Last week US equities saw a hard test of structural trend support and held - the trend is your friend until it bends. It is important to note that the recent rally up off the lows appears corrective and is at risk of reversing early this week. All bullish market trends previously identified remain in tact until proven otherwise. The DXY appears to be wedging into the lows, opening the door to a sharp bullish reversal likely to coincide with a risk-off reaction. There are too many mixed...

Last week saw a decline in risk assets as markets digested hot CPI and PPI numbers. The narrative proposed by central banks is that any inflation is likely transitory and therefore not sustainable. We do not agree - as highlighted in our 2021 year ahead report, we see a rising risk of stagflation given excess central bank liquidity, expansionary fiscal policy, demand shocks, supply shocks and increasing labour costs. None of which is priced into the market. While we do not have evidence of a...

Global macro market trends remain intact driven by global liquidity, leverage and ultra-low interest rates. The only likely trigger to pop the "everything bubble" is rising rates in a highly leveraged world. How long can the Fed pin rates? Global markets are warning that our stagflation outlook is becoming a higher probability outcome. Buyer beware. Our big picture outlook for SPX remains unchanged. We are in the latter stages of a final 5th wave rally from the 2009 lows. While risks are...