The Mars Market Update — Live Research

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...

On December 10th we got a hard test of the October lows in US equity indices. The SPX, Dow and Russell all made new cycle lows while the Nasdaq indices did not. This has important implications and confirms our big picture outlook with the new cycle lows confirming that the October decline was only wave 1 or A of a bigger picture decline. Given today's price action we have three potential near term wave counts but ALL lead to a breakdown of the H&S top markets have formed over the past 12...

NB: Due to last week's holiday, the COT data has not yet been released by the CFTC. We will be updating charts when the sentiment data is made available. Last week, we were looking for the bear market to reassert itself once the wave (c) ending rally completed. While we fell short of ideal upside targets, the decline confirmed our bearish outlook. All indices are now testing major support, a clear break of which should lead to an accelerated decline in wave (iii) of 3 consistent with our...

Last week, the equity bulls made their stand at support as anticipated.  With the assistance of a dovish Powell, equities launched higher in what is expected to be wave (c) of a larger corrective rally. Over the weekend, the US / China trade tensions also subsided adding further fuel to the relief rally.  This week will likely be a key test for the bigger picture market structure as equities rally towards our wave (c) targets from where we should see the bear market reassert itself. The...

NB: I am travelling next week so the update is getting posted early in advance. Please note that the COT data will not be included as it doesn't get released until next week due to the Thanksgiving holiday. This week equities traded lower as expected to retest the October lows - while the Nasdaq Indices have already broken the October lows, they are yet to be confirmed by the broader indices. Our thesis remains the same - the bigger picture trend in equity markets remains down until proven...

Last week we got the impulsive decline we had been looking for into Fib support for US equities. From a big picture perspective we now have 5 waves down and 3 waves up terminating at 61.8% Fib resistance indicating a bigger picture change in trend to down. The question is whether the 3 wave rally was ALL of wave 2 (red count) or part of a more complex a-b-c correction (blue alternate). Either way, we should expect a decline to retest the October lows. The US bond market is now at a key...

Last week US equities rallied in 3 waves into our targeted resistance areas. Minimum conditions have been met for a counter trend rally so the door is now open for the bears - the question is whether this rally was ALL of wave 2/B or only wave (a) of a more complex correction. Importantly, both our highest probability Base Case and Bull Case remain valid. The micro structure of last week's rally is less clear and keeps the door open for more complicated wave counts. The problem is that some...

Last week we got the strong count trend rally we were looking for - our disciplined process enables us to take the emotion out of the market. We were bearish at the new ATH's and bullish at the panic lows early last week. This week will be important for the run up into year-end with the US mid-term elections either enabling or disabling Trump's immediate agenda. In this update we have undertaken scenario analysis to prepare for the market's reaction to the mid-terms. So far the markets...