The Mars Market Update — Live Research

Global equities extended their gains last week as our near term bearish count was quickly invalidated. While equities rallied, it is interesting to note that the US dollar and rates remained largely unchanged for the week. Commodities were also well bid late in the week confirming the risk-on market. The global markets have truly embraced the Powell Pivot. From a big picture perspective, the SPX (our proxy for global risk) only has 3 waves down from the 2018 ATH's followed by an impulsive...

Last week, global equities reversed lower with the SPX and Nasdaq stalling out at respective 200 day sma's. European equities continue to be the worst house in a bad street. Bonds rallied unexpectedly while the US dollar strengthened across the board. Commodities and precious metals also appear to have topped out near term. Please note that we will update the COT sentiment data once the CFTC has has updated its files following the government shutdown. Last week the SPX / ES likely topped out...

Global equity markets either topped in 2018 or are in the process of topping. We have a potentially complete 5 wave impulsive rally from the 2009 lows that terminated in September 2018. However, due to the corrective looking 3 wave pullback into major support, we cannot confirm with confidence that the bigger picture rally is over. We need to see 5 waves down from the highs to signify a change in trend to down. We expect a year of increased volatility as investor hope and faith...

"In the Fed we Trust" - global risk markets continue to be dominated by the whims of the Fed - this is a market where "hope" and "faith" (assurance of things hoped for, evidence of things not seen) are preferred over economic reality and free markets. Our goal as market participants is to understand key market drivers at any given point in time. Dogma of what "should be" is rarely rewarded and despite all of its flaws, the Fed is driving market sentiment and flows right now. This week will...

Last week, global equity markets continued their rebound as traders and investors alike embraced the "Powell Put". Markets are at an important near term inflection point as it back-tests the October 2018 lows. So far we only have 3 waves down of equality from the ATH's - we require 5 waves down to signify a bigger picture change in trend. The rally from the lows is only in 3 waves so far and needs to extend into 5 waves up to signify an intermediate change in trend to up. This week will be...

Please note that due to the US govt shutdown, the CFTC COT sentiment data remains unavailable. Expect China trade talks and more Fed speeches (and FOMC minutes) this week to drive headlines and risk sentiment. Last week, Chairman Powell stepped up to intercept the Bears just when the markets were attempting to break down - the reality is that the fundamentals have not changed. The world is drowning in debt and the only solutions are default or continued monetization - Chairman Powell is just...

Please note that the CFTC has not updated its COT data but it should be back online next week. Equity markets rebounded strongly last week from near term support areas. So far, we only have 3 waves down from the ATH's and no confirmed bigger picture change in trend. This latest rally does not appear to be a broad cross-asset risk-on recovery as yields continued lower, PM's remained well bid and the US dollar broke lower against the Yen. The ES rebounded from our 2300 targeted support area and...

Given the holiday shortened week and the fact that I'm travelling over Xmas to visit family and friends, I've posted this update early. The bears remain firmly in control of this market as the Fed clearly signalled no immediate bailout for the bulls. Our bearish equities outlook continues to be rewarded. All US equity indices have either met or exceeded minimum downside equality targets. Given that we have had a good run, we will be alert to any potential changes in trend as we continue to...

Keep a close eye on the Fed this week! Last week, global equity markets continued to decline in line with our bearish expectations. US equity markets are once again testing major support with the Fed on deck later this week. We are starting to see more market mavens such as Stanley Druckenmiller call for the Fed to pause in its tightening despite continued strong US growth. One can't help but be sceptical with equity bulls trying to exit underwater longs. The key question this week is whether...