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What Can We Expect from Stagflation?

The PCE rises (although far from the 8% peak). The GDP falls (is contraction of the economy over?). Meanwhile, stagflation persists along with the trading ranges in indices and many sectors. Plus, the theory we have been expounding on (a 2-year business cycle within a longer 6–8-year business cycle) gets more relevant every week.

How long can this trading range continue for?

Looking at the Dow Jones Industrial Average, the range has been from $31,4239.82 to $34,342.32 in 2023. Historically, we have seen the Dow remain rangebound for years (1968-1982). In current times, though, things move much faster.

The 23-month moving average is a shorter-term cycle within a longer-term cycle. The DJIA is sitting right on the monthly MA-teasing investors during a tough time making a prediction of the next major moves.

With April about over, it will be fascinating to see if the DJIA closes above or below the blue line or 33,600.

It could be that the economy has contracted enough for now and will grow marginally. It could also be that inflation peaked at 8% but could still have more upside. There are many factors to consider such as geopolitics. But for now, we are accepting that stagflation remains the theme. If so, we are looking at sectors outperforming the 2-year cycle showing expansion.

Interestingly, some growth stocks (META APPL MSFT), defense sectors (Raytheon RTX), consumer staples (PG, Walmart), global streaming stocks (FWONA), and a few commodities (GLD, SLV, Sugar) fit that bill.

Our NASDAQ All-Stars model has picked up on these growth stocks.

Now that META has wowed (and handily cleared the 23-month moving average), perhaps we will see the others join in as they get ready to report.

Here are the other positions relative to the 23-month MA.

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

Mish and Charles discuss zooming out, stagflation and picks outperforming stocks in this appearance on Making Money with Charles Payne.

We all know at this point how difficult the market has been with all of the varying opinions regarding recession, inflation, stagflation, the market’s going to come back, the market’s going to collapse – ad nauseam. What about the people stuck in the middle of a range bound market? Mish presents her top choices for shorts and longs on the Friday, April 21 edition of StockCharts TV’s Your Daily Five.

Mish and Benzinga discuss the current trading ranges and what might break them.

Mish discusses what she’ll be talking about at The Money Show, from April 24-26!

Mish walks you through technical analysis of TSLA and market conditions and presents an action plan on CMC Markets.

Mish presents two stocks to look at in this appearance on Business First AM — one bullish, one bearish.

Mish joins David Keller on the Thursday, May 13 edition of StockCharts TV’s The Final Bar, where she shares her charts of high yield bonds, semiconductors, gold, and regional banks.

Mish joins Wolf Financial for this Twitter Spaces event, where she and others discuss their experiences as former pit traders.

Mish shares her views on natural gas, crude oil and a selection of ETFs in this appearance on CMC Markets.

Mish talks what’s next for the economy on Yahoo! Finance.

Mish joins Bob Lang of Explosive Options for a special webinar on what traders can expect in 2023!

Rosanna Prestia of The RO Show chats with Mish about commodities, macro and markets.

Coming Up:

April 28th: Live Coaching Complete Trader and TD Ameritrade with Nicole Petallides

May 2nd-5th: StockCharts TV Market Outlook

ETF Summary

S&P 500 (SPY): 23-month MA 420.Russell 2000 (IWM): 170 support-180 resistance.Dow (DIA): Over the 23-month MA.Nasdaq (QQQ): 329 the 23-month MA.Regional Banks (KRE): 43 now pivotal resistance.Semiconductors (SMH): 246 the 23-month MA.Transportation (IYT): 202-240 biggest range to watch.Biotechnology (IBB): 121-135 range to watch from monthly charts.Retail (XRT): 56-75 trading range to break one way or another.

Mish Schneider

Director of Trading Research and Education

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