The Mars Market Update — Live Research

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....

Primary market trends remain in tact but uncertainty remains. Trump's fiscal negotiation backflip set up a bearish reversal but we didn't get the downside follow through required for a change in trend. The Russell 2000 broke to new cycle highs as expected as the US$ weakened and the risk-on recovery continued. Bonds broke lower as expected but this decline is expected to be short-lived (we remain bullish bonds from a big picture perspective). Commodities rallied across the board as the US$...

Last week, the equity bulls managed to hold important near term lows and rallied impulsively (as tweeted) before correcting lower later in the week. The bulls remain in control as we look for the risk-on environment to continue. Primary bullish trends remain in tact with impulsive equity market rallies, pinned rates, a weakening US$ and corrective commodity declines. Take note of the bullish divergence between the RTY and NQ following Trump's covid announcement - this implies traders are...

Last week, equities continued to stair step lower but rallied strongly to end the week. Unfortunately, the decline has not done enough to confirm a bigger picture change in trend as the decline is not clearly impulsive. The US$ rebounded sharply as expected but is only 3 waves up of equality from the lows so far to potentially complete wave 4. PM's broke sharply lower as warned for what should have been a wave (c) of 4 decline but bulls need to make a stand here. Rates continued to compress in...