The Mars Market Update — Live Research

The SPX break of its 200 day sma was NOT confirmed by other markets.  As expected, the 200 day sma has acted like a magnet across the major US indices as the bulls held support all week only to break on Easter Monday. Our defensive positioning on these markets has not changed. Each rally attempt has been corrective on light volume while each decline has been impulsive on heavy volume - "volume is the footprint of the herd". The question is how can these risk markets rally while Trump continues...

Equity markets are testing key support levels early this week. Defending the 200 day sma is paramount to the institutions. The US$ and PM's remain range bound while bonds look to be ending a corrective rally. Crude Oil appears to be on the edge of a major decline with historically high bullish sentiment. USDCAD is our favourite currency play right now. Last week we highlighted the fact that global equity markets were fragmented and the near term path was uncertain - however, we maintained our...

Equity markets failed to follow through on the upside last week as Tuesday's bearish engulfing day triggered a correction in US markets. This week risk markets will be focused on Wednesday's FOMC while awaiting Trump's inevitable attack on China's trade policies. This will have important implications for the US$, Gold, Bonds and global equities. Early last week I tweeted that the Dow was our "canary in a coalmine" as it rejected overhead trend resistance calling into question the bullish case....

Friday was a key inflection point - the market had two binary choices on the post-NFP gap up into our sell zone - (i) an early reversal would have triggered a bearish reversal (ii) gap and go invalidated a number of our near term sell signals - unfortunately for our positioning, the bears fumbled and the bulls took hold to change the near term trend. Knowing where we are wrong is critical for our trading process. The big picture question is whether this is the start of a new bull market to new...

Last week we were looking for early equity market strength to fade. Tuesday kicked off a nice impulsive decline that met our initial downside targets. Europe and Asia were the worst hit with Trump stepping up his trade war rhetoric. The bond markets bounced off support but only in a "corrective" 3 waves so far. Finally, the US$ failed to sustain its rally and stalled at our wave (iv) resistance and triggered a bearish reversal day. There is a lot of headline risk this week with Italian...

Last week we were looking for a resumption of the decline in equities but the bears fumbled the ball at the 5 yard line. Now things get more complicated. Importantly, the bond bulls held key support on TLT highlighted last week and the US$ bulls made the first steps in trying to reverse the intermediate trend. Important: New Fed Chair Powell testifies with Q&A on Tuesday (likely market moving event) While the near term SPX count is now more complex, the bigger picture count remains the...

While I was on vacation the global equity markets had a mini heart attack. Fortunately, we identified key support and resistance areas of this volatile move and kept on the right side. We are now at another important juncture across asset classes. What we know: ES / SPX - Impulsive decline from the ATH's into the 200 day sma followed by a 3 wave rally into measured resistance DXY / Euro - new cycle extremes on Friday achieved the minimum downside objective for wave (v) of 5 for the US$ (an...

We have been warning that rising bond yields would be negative for the stock market (and not supportive as most pundits think). While anticipating an acceleration in rising yields to increase our confidence of a 3rd wave decline in bonds,we were also focused on the clear 2018 ES trend channel rally, a break of which would trigger a larger decline. This week we saw the ES trend break leading to a large sell-off (that's what happens after an exponential rise) as bond yields started to accelerate...

I am posting this update early on Saturday as I head off on vacation tomorrow. I'll be back on February 16th but will be monitoring markets while away (hopefully not too much). Last week saw the continuation of our primary trends - US equities continued to outperform Europe and Asia; the US$ decline continued as commodities rallied; and global yields are trying to break out. The late stage exponential equity market rally continued in the US. Even using semi-log weekly charts, the start to 2018...