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Remember Those 3 Signs of Inflation to Watch?

As a follow-up to a daily I wrote earlier in January called “Super Cycles Do Not Just Fade Away”, yesterday’s January 23rd daily was all about one of the three indicators that can get us prepared for more inflation.

On January 5th, sugar was still trading under 22 cents. Since then, SUGAR is up another 15%. A quote from yesterday:

“Most noteworthy is the notion of super cycles. Sugar is a great example of a 400% move higher since 2020, followed by a near 40% move lower. And currently, a 20% move up since it reached the nadir of 20.00.

“Volatility — yes — is the inherent nature of a super cycle.”

The second indicator I wrote about on January 5th was how SILVER performs relative to gold. When silver begins to outperform gold, that is generally an inflationary sign. This is a good time to remind you that the chart of CPI overlaying the 1970s with current times lines up incredibly well. Has CPI troughed?

With so many saying inflation is over, clearly, they have not been paying enough attention. Maybe now they will.

Silver, for the second day in a row, is outperforming gold. The chart of March futures shows us that momentum could be just about to flash a mean reversion. Furthermore, $22.00 is a solid risk point, with overhead resistance at $24.

The 3rd sign is the DOLLAR, and if it makes a more drastic move lower from its current rangebound price action.

The dollar is wedged between the 50 (blue) and 200 (green) moving averages. We can hardly say that it is collapsing, or giving us cause for major concern right now. Momentum is declining, though, and a move under the 50- and 200-MAs on our Real Motion indicator might raise some eyebrows — especially if the price fails 102.

This week, we have PCE numbers coming out. This is a lagging indicator, not a leading indicator. We can assume that the number will be subdued, which should give the Fed room to discuss rate cuts for March. Hence, we can be patient on the inflation plays for now — but certainly not complacent.

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Mish in the Media

Mish makes up a new ETF (not real) called VAIN, but really discusses the basket of stocks that are worth watching in this appearance on Yahoo! Finance.

Mish discusses Alibaba and how the rumors of China’s impending demise might be a bit exaggerated on Business First AM.

Mish talks all about retail and stock pick Abbvie (ABBV) on Business First AM.

Nicole Petallides and Mish dig deep into trends and stocks to watch for next big moves, as we are in full January trend mode on this video from Schwab Network.

On the Monday, January 22 episode of Your Daily Fivefrom StockCharts TV, Mish sees the potential for consumers to spend more money, from self-help to dieting, to makeup to skincare to fashion — pointing out several relevant stocks and how to trade them.

Mish looks at a selection of popular instruments in this video from CMC Markets, outlining their possible directions of travel.

Mish joins Jason Perz on the Against All Odds playlist, where she covers it all talking the mental game of trading, commodities, futures, equities, technical analysis, and macro.

Mish’s Market Minute on StockCharts TV returns, all new! Mish and Geoff Bysshe share how the powerful “Calendar Range” StockChartsACP plugin tells you who and what to believe, when to act, and what to trade. The new year is a big “reset” emotionally, and January sets the tone for the next six months AND the year. Every month is “like an inning in baseball,” financial reports focus on quarters, but analysts think in terms of the first half and second half of the year. How can you harness this knowledge to your benefit? Watch to find out!

Coming Up:

January 25: F.A.C.E. with Dale Pinkert & Live Coaching & CNBC Asia

January 30:Breakfast Bites, Singapore Radio

February 2: Benzinga Pre-Market Show

February 5: Money Show Life with Chuck Jaffe

February 21-23: The Money Show in Las Vegas

Weekly: Business First AM, CMC Markets

ETF Summary

S&P 500 (SPY): 480 now the pivotal zone.Russell 2000 (IWM): 195 pivotal, 190 support to hold.Dow (DIA): 375 support.Nasdaq (QQQ): 408-409 support.Regional Banks (KRE): 50 key to hold.Semiconductors (SMH): 184 support.Transportation (IYT): 262 now pivotal.Biotechnology (IBB): 135 pivotal.Retail (XRT): Held support at 65, but still needs to get back over 70.00.

Mish Schneider

Director of Trading Research and Education

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