January 22, 2025
Mish's Daily
By Mish Schneider
As we see headlines on the spectacular AI infrastructure deal, we also see pushback by Musk doubting the companies involved have the money to put up the first $100 billion let alone $500 billion.
This is exactly why we must follow price.
Using the calendar ranges, the MAG7 continues to dominate.
The chart of MAGA looks good as long as the price stays above the calendar range high depicted in a green horizontal line by the blue arrow.
Furthermore, MAGA is quite far from the all-time high we saw in November.
Momentum continues to flash a bearish divergence.
While the MAG7 and MAGA stock performance is healthy, it is still not the value play lots of analysts expected.
What has not broken out that needs to for a convincing stronger US economy?
Retail-as seen thru the lens XRT, without consumer confidence, it will be hard to sustain a rally
Regional Banks-sure the earnings were great in the big banks, but KRE the ETF is struggling and that could be a heads up. Note the breakout and then reversal or failure to hold above critical resistance.
30-Year Long Bonds TLT As the Federal Reserve and their rate policy going forward will not impact the AI stocks too much, it will impact the value stocks. Rates need to stay below 4.7%. At this point, TLT rallied to resistance and has not cleared the calendar range.
What has broken out and must stay firm?
Russell 2000 IWM broke out of the calendar range but not over the 50-DMA. Granddad is still in a warning phase and must hold up.
Transportation IYT Better shape than the Russell’s, but also way more
vulnerable than the Semiconductors and growth stocks. Note that this is number 2 as far as best shape after Semiconductors SMH, which is why it is so important it stays that way.
Incidentally, I will cover commodities for the weekend Daily. They are virtually ignored while gold is close to making a new all-time high. Stay tuned!
Educational purposes only, not official trading advice.
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Coming Up:
January 23 Kitco News
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) 599.70 major support after the new All-time highs
Russell 2000 (IWM) 227 now must hold
Dow (DIA) 436 support
Nasdaq (QQQ) 528 the calendar range high cleared now must hold
Regional banks (KRE) A move over 64.25 better
Semiconductors (SMH) 260 now support as this takes the lead in the Family-again
Transportation (IYT) 71.16 important to hold
Biotechnology (IBB) 137 key to clear for a further rally
Retail (XRT) 81 must clear 78 must hold
iShares iBoxx Hi Yd Cor Bond ETF (HYG) 79.40 the calendar range support
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