The Mars Market Update — Live Research

The equity markets finally broke down on strong selling in a 3rd wave decline as discussed yesterday for my black preferred count to be correct. My analysis suggests that we still have a couple of 4th and 5th waves to unwind lower before this initial decline comes to an end. Last night provided a clean acceleration gap lower which is a signature of 3rd wave moves, trapping the longs above prior support. This count is invalidated with trade back above 1684. For now, the bears are in control and...

Another day, another whipsaw session in the US markets. Every populous talking head is screaming "HEAD & SHOULDERS" top. I'm not convinced. There is a reason I have NO positions here in equities or FX. Let me give you a little insight into how my trading mind works... I am a big believer in inter-market analysis. When trends are strong, they will be confirmed by correlated markets, when they are weak, market fragmentation occurs providing warning of a change. When I look at the SPX, I also...

Equity markets sold off impulsively in a morning pop and drop into marginal new lows, then reversed higher from a confluence of trendline support (updated chart posted live on the DWA forum) to complete a bullish reversal day. The NDX made a new 2013 high driven by AAPL's breakout but was unconfirmed by other major indices. Last night's market action leaves the short term direction unresolved. The "cleanest" count for me is that last night's low was wave b of an expanded flat with a wave c...

I have spent a LOT of time going over my charts this weekend trying to determine where the various markets are heading next. This is often difficult in thin summer range-bound trading which is what we are witnessing now. The equity markets appear fractured with no clear leadership. PM's are stronger, equities range-bound and the US$ found support at critical levels demonstrating non-confirmation at key turning points. Where to from here? The equity markets have been range-bound over the last...

The US$ made new lows against the JPY/EUR/GBP/CHF as demonstrated by the DXI. I managed to escape with only minor damage to the P&L exiting soon after the Carney reversal Carnage. Sometimes you just have to take the loss and move on. If Mr Market is not doing what you expect, then you're probably wrong and holding on in "hope" is alluring but often costly. The Euro was the last market to relent to US$ weakness but the writing was on the wall with all other pairs breaking out. Time to...

If in doubt, get out. Lowered SL's after spike down, only to see both Euro and Pound reverse higher. Time to step back and reassess.

Last night's impulsive decline helps clear up the near term structure somewhat. While it needs one more low tonight for wave v, the impulsive decline will either be wave (c) of (iv) of an expanded flat which is my preferred scenario or wave (i) down of a more bearish decline. What we must focus on now is what happens after this initial decline is complete. Is the rebound higher corrective or impulsive??? We have central bankers Bernanke and Carney speaking tonight so we can expect some...

The Euro turned down where it had to and I really don't want to see it back above the day's high (1.3324). Bears need to see this trade impulsively back below wave (b) at 1.3232 to lock in 3 waves up from the lows.

While equity markets consolidate their gains at new all-time-highs, the US$ is threatening to break down, nearing my GTFO levels for both the Euro and Pound. Who said trading is easy? That's right, no-one! This is why we manage risk. We do the analysis, identify trade setups, execute within well-defined parameters, then let the markets decide what they want to do. My trading strategy is all about playing great defense, limiting risk to any one trade to 1% of capital. My entry level positions...

The equity markets closed the week on their highs once again as dip buyers prevailed in the face of uncertainty. The trend is up. Price is the final arbiter of performance and there is no stopping the bulls here with global liquidity providing the wind in their sails. As the disconnect between the underlying economy, societal mood and equity valuations continue to reach extremes, so does the risk of a market shock. The waves tell us we are in the 9th inning of this bull market since 2009, but...