The Mars Market Update — Live Research

As noted last week, global equity markets remain in near term topping patterns - I see no value in being long equities at this point in the cycle. There remains no convincing evidence of a sustainable top in place so I remain flat equities until further notice. I just don't see the risk/reward here for long positions. I am watching for a potential bearish reversal in Bonds.  Last week I highlighted the potential for a triangle thrust higher in the SPX which is what we got on Monday. There are...

Sometimes, when the markets are quiet, it helps to step back and look at where we are in the bigger picture. This helps anchor our risk/reward trading decisions on the shorter time-frames. I continue to posit that we are late in the 9th inning of an ending multi-decade bull market. It is important to keep this in mind when positioning long term portfolios. What we can see on the monthly SPX chart below is that we are nearing the end of wave 5 of V. The expectation being that when this bull...

Last week's volatile price action has created a lot of uncertainty in the charts with a lot of trend momentum breaking down. As such I have flattened positions until we get a clearer picture of market structure. FOMC later this week should help provide clearer market direction. The clearest trade potential is for ES shorts against Friday's highs but this is a very risky trade to try and pick tops in a bull market. The near term trends in JPY, PM's and Bonds appears to have broken down near...

Last week, our themes of bullish bonds and PM's and bearish US$ continued. The global equity markets have remained resilient with some indices breaking out to new ATH's despite the conflicting signals sent out by the Yen, Bonds and PM's. While we expect these themes to continue, the US equity markets are challenging important resistance zones - most importantly, the Russell 2000 which is threatening to break out of a 3 month symmetrical triangle. With our risk-on indices threatening a breakout...

Last week saw US equity bulls push markets to new cycle highs invalidating our near term bearish count. The question is whether this latest rally was the start of wave (iii) of 5 higher or wave B of a more complex wave 4 correction (Expanded Flat or Running Triangle). I am looking for early strength this week to be reversed in line with a wave B fake-out high. I am bearish USDJPY and bullish bonds and PM's. I am awaiting signs of a bearish reversal for equities. What we know: Global equity...

Late last week I posted an interim market update highlighting the key market risks right now. My base case is that last week's decline was only the first leg of a larger decline for wave (c) of 4. Ideally, the next week is a period of risk-off where we see equities decline while Bonds, PM's and Yen rally. New ATH's in the SPX will invalidate this scenario. We had a pretty good week identifying topping patterns in the equity markets that led to a 50pt flush in the ES. The USDCAD and Palladium...

Given the increased volatility over the last few days and important moves in the US$, PM's and Bond markets, I wanted to update members on some potential near term scenarios... The US$ has now broken important long term support. We must now presume we are in a period of increased US$ volatility and a larger 4th wave correction which ultimately targets a retest of the May 2016 lows in the 92.00 area for the DXY. This has important implications for the intermediate term view for commodities and...

We continue to see equities topping near term with risks to the downside while Bonds and the US$ are both at important inflection points. Crude Oil has now confirmed its turn higher while Palladium is threatening to make another marginal new high. This is a very important week for the Euro, Pound and Bond markets. It's also a big week for the CAD. Global equity markets appear to be topping near term to complete large degree 3rd waves within a bigger picture bull market. We are starting to see...

Our big picture global macro trends remain intact. Equity bull markets continue to make new cycle highs as expected while bonds are threatening to break down. Commodities fell hard last week as the one-sided reflation trade stalled with too many longs finally capitulating. There is a good reason why we focus on trader positioning as well as price charts. It tells us when to avoid the herd or actively bet against them in crowded trades. Herd mentality is a key driver of financial markets,...

"If we are truly back in risk-on mode, we should see equities and the USDJPY rally while bonds and PM’s should be sold." MCP Market Update: April 24th, 2017 So far so good with our post French election risk-on stance as the bulls took the ball and ran with it. The Nasdaq and Russell push to new ATH's while the SPX and DJIA fell (just) short. However, the most important market event that happened last week was the DXY made a marginal new low which changes our intermediate term stance on the...