The Mars Market Update — Live Research

Please note: due to the upcoming holidays, our next update will be published in the new year. Wishing all our clients and their families a happy Holiday season and prosperous New Year! Last week saw the continuation of our primary market trends - strong equities, weak US$, strong commodities and pinned rates. It is important to note that we see the US$ decline as a key driver of these trends and that it is in an ending 5th wave from the March highs. Our equity market analysis also implies that...

Last week, global equities stalled at trend resistance but the decline is NOT clearly impulsive and failed to break any meaningful support. The DXY traded sideways but the trend remains lower in wave 5 of (C) until proven otherwise. Bonds recovered but only in a corrective 3 waves of equality as the long end continued to underperform. Industrial commodities continued to push higher while PM's failed to see any upside follow through and remain range bound. The SPX / ES faded back below trend...

Global equities continue to grind higher in this risk-on rally and there is no evidence of a tradable top. The DXY broke major trend support and extended lower in what is expected to be a 5th wave decline. Commodities rallied across the board, driven by the weaker US$, rising rates and hopes of a reflationary rebound. At a time when the bull market continues to extend and pretend and retail traders pour into the option markets, it is important to stay focussed on the big picture wave...

Note: Due to the Thanksgiving holiday the COT data has not yet been released. We will update when available. Low rates coupled with a weak US$ remain supportive of risk assets while the PM's continue to underperform. The SPX / ES failed to confirm a bearish change in trend with only 3 waves down last week while the Nasdaq indices rallied as expected in wave (c) / (iii) higher. Both Crude and Copper pushed to new cycle highs. The SPX / ES failed to see the downside follow through we needed for...

Last week global equities consolidated recent gains with an inside week. The US$ remained under pressure supporting commodities while bonds rallied across the board. Importantly, the SPX / ES held our key near term resistance and stair stepped lower but the decline is not clearly impulsive and we have no confirmation of a market top. This is a holiday shortened week leading into month-end and we should all give thanks that a Covid vaccine is potentially on its way. Near term bears need to hold...

Last week saw a continuation of the equity market bull trend with renewed hopes of a Covid vaccine while global infection cases soar. This appears to be an improbable combination but hope springs eternal. Interestingly, while the SPX, DJIA and Russell all pushed to new ATH's, the Nasdaq indices lagged and did not confirm the broader global equity market rally. The US$ remains bearish as we look for a 5th wave thrust lower and rates remain range bound. Please note - the COT data will be added...

Early last week we tweeted the bullish turn in risk assets before the election. Since then, equities rallied strongly to now retest ATH's in the ES and NQ. The Russell 2000 made new cycle highs as expected, crude oil rallied and the US$ reversed lower. A Biden win coupled with a likely GOP senate implies government gridlock - no new taxes; no reversing Trump tax cuts; limited stimulus; no green deal; and no new tech sector regulation. While Wall Street naturally assumes gridlock is bullish,...

Last week we highlighted the potential asymmetric risks facing the market pre-election. We warned that the recent corrective rallies highlighted downside risks for the market on a break of measured equality and the 50 day sma. The market broke support and sold off all week as the DXY rallied from equality support. What we didn't expect was that rates would rise in a risk-off environment. Crude Oil broke lower and tagged our equality target. With the US election and FOMC this week we are at an...

Markets appear to be treading water with a bullish bias leading into the all-important US elections - what is NOT being priced into the markets is a contested election result or continued gridlock with split house and senate. The markets appear to be relying heavily on the "hope" of a large stimulus package to continue to support the economic recovery - the contrarian asymmetric trade setup may be to buy long dated equity puts, long VIX calls and long bond calls leading into this election......

Last week, the equity markets extended gains in what appears to be a corrective overlapping 3 wave rally of equality (the Russell rallied in an impulsive 5 waves). The DXY also rallied in 3 waves of equality before turning lower confirming that the bigger picture trend remains down. Rates little changed on the week while commodities remain mixed. Markets may remain volatile near term as indecision reigns in the lead up to the election. This is a low conviction environment so trade accordingly....