Inflation, Soft Landing, January Trend Trade-Working Out

January 15, 2025

Mish's Daily

By Mish Schneider


Banks did it again-and many believe they will continue to outshine with a soft landing--but is that still the case? 

CPI and PPI numbers may have come out softer, but the Empire ISM numbers show not only a shrinkage in productivity, but also that prices paid reached an 8-month high, while the outlook for the next 6 months is at 2-year highs. 

Yes, markets are happy as yields and the dollar softened, but what else is rallying? 

Silver, Gold, Oil, Corn, Copper, and Coffee.  

Only Sugar, my main inflation barometer outside of the silver to gold ratio, is up, but not up this year. 

Sugar, as shown in the weekly chart, has broken down under the 200-WMA for the first time since December 2020. However, it is holding the August 2024 low.  

Sugar has been my go-to barometer for years.  

You know what did make a new January high today and has not traded at these levels since 2018? 

Ripple XRP. Big news as Donald Trump says: "We will be doing something great with crypto!" XRP will be great.”  

I mention this because it made my Top 10 Picks in the Outlook 2025. 

To sum up- 

Don’t get too excited about the lagging indicators-instead focus on the present and future. 

Most instruments are still in the January trading range, and we do not know yet what will clear and what will fail. 

Today, for example, the indices have rallied into resistance and the January trend trade is alive.. 

In fact, at the time of writing, QQQ and SPY (barely) had cleared the 50-DMA, but small caps IWM and DIA have not. 

IWM rallied to the January 6th high, so look how the stars will align? 

January trend trade sets Thursday-it’s so exciting. 

Nonetheless, most of the key sectors also remain below their 50-DMAs. 

However, on the weekly charts, as I have written about recently, everything remains in a bull phase except IBB Biotechnology.  

The bigger news of the day-Quantum Day announced by Jensen Huang, which sent the beat-up Quantum stocks soaring. 

I have recently mentioned QUBT as a fave. That was up 54% at one point today.

 

I was honored to be a part of the Money Show’s Annual Picks for 2025. A panel sat down with Mike Larson, Editor in Chief of the Money Show, to discuss value versus growth and our picks.  

The free report Money Show’s favorite experts picks.

 

Educational purposes only, not official trading advice.  

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more. 

 


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Mish in the Media-Want to see more? All clips here 

Outlook 2025, the PDF This will set you up on the right side of the market along with many picks 

Podcast Geoff and Mish Mish and Geoff discuss that January lows are in but that’s different than a breakout 01-13-25 

BNN Bloomberg In spite of cool numbers, inflation still getting hotter-and some picks 01-15-25 

CNBC Asia Waiting for the January Calendar Range Reset D: Mish discusses that growth stocks could break out first, but best to wait until we have the true range 01-14-25 

Singapore Radio Broadcast Mish discusses that price discovery is crucial and will determine the narrative for the economy and market 01-13-25 

Business First AM Having trouble making money so far? Mish explains the importance of the January Trend Trade 01-10-25 

Real Vision Mish sits down with Andreas Steno Larsen to discuss many areas of the market and some picks 01-08-25 

Money Show Podcast Panel offering you their top picks for 2025 and why 01-08-25 

 

Coming Up: 

January 23 Live Coaching 

January 27 Podcast   

January 31 BNN Bloomberg  

Weekly: Business First AM  

 

ETF Summary 

(Pivotal means short-term bullish above that level and bearish below) 

S&P 500 (SPY) Scraped the 50-DMA-needs more 

Russell 2000 (IWM) 220 now support 227 resistance to clear 

Dow (DIA) 435 the 50-DMA 

Nasdaq (QQQ) 514 must hold to confirm bull phase 

Regional banks (KRE) 60 must hold  

Semiconductors (SMH) Cleared the 50-DMA now must hold 

Transportation (IYT) Nice pop right up to but not thru the 50-DMA 

Biotechnology (IBB) 135 to clear   

Retail (XRT) 79 pivotal   

iShares iBoxx Hi Yd Cor Bond ETF (HYG) Here is where we find the biggest risk on look 

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