The Mars Market Update — Live Research

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...

The everything bubble continues to inflate risk assets until it doesn't. We see no evidence of weakness in the bullish market trends as primary equity markets subdivide higher. We continue to look for a major market top in 2021 but we're not there yet. Global risk remains supported by excess liquidity, low rates and a weaker US$ - until these trends change, the story remains the same. Commodity markets continue to rally impulsively from the 2020 lows signalling a bigger picture change in...

The risk-on sentiment continued last week as global equities continued to rally, the US$ declined, rates stabilised and commodities caught a bid. Bitcoin broke sharply lower from our ending diagonal over the weekend but is yet to confirm a change in trend. While global risk is extended near term, the everything bubble fuelled by low rates and excess liquidity remains in force until proven otherwise. It's always risky blowing bubbles so buyer beware. The SPX / ES continued to extend gains and...

Last week saw a continuation of the bullish equity market rally. The SPX and DJIA led the way breaking clear of new ATH's while the Nasdaq rallied to retest its ATH's. The Russell continued to lag as it remains trapped within a 4th wave correction. The DXY turned sharply lower from resistance while rates and Gold turned down from resistance. This week's CPI data will be instructive for the near term outlook for rates. Equity Markets The clearest equity market structure remains the Russell 2000...

The bull market rally continued as the series of corrective declines and impulsive rallies remain intact. Yes, the equity markets are extended, but as long as we continue to see higher highs and higher lows, the bulls remain in control. Despite the strong NFP on Friday, long bonds held support while the US$ weakened across the board. Commodities remain mixed with CL and RBOB leading the declines while Dr Copper rallied. Last week I tweeted a SPY chart showing the potential for an ending...