My neighbor runs several small businesses in Chicago.
Good guy. Really good friend. We text all day long. Yesterday, he told me something terrifying.
He's been talking to his friends who own small businesses: cleaning, plumbing, real estate…
They're all saying the same thing: This is the last year they can keep prices contained.
As of January 1st, they're all raising prices. Every one of them.
Cash flow is down. They're laying off people. No bonuses this year.
They can't keep prices down anymore.
They're going to be forced to raise prices to pay employees a living wage and pass those costs on to customers.
Small businesses are defined as businesses with a proprietary owner and up to 45 to 50 employees.
You're talking about millions of people in thousands and thousands of small businesses across America who are going to raise prices simultaneously on January 1st.
The market hasn't priced this in at all.
Politicians keep saying inflation's coming down. It's not. And in eight weeks, the market's going to get proof.
However, shorting blindly without a clear signal will make you broke and right…eventually.
The key is to track the algos and watch their positioning.
For most traders, that’s an impossible task.
For Genesis COG members, it’s as simple as pulling up our proprietary scanner.
Now, I know what you’re thinking: Jeff, this market is on a one-way ticket higher.
Let me convince you otherwise.
This Is Different From What the Government Tracks
The government focuses on big business inflation data. CPI reports. Corporate earnings. Fortune 500 pricing power.
That's not where the next wave is coming from. It's coming from millions of small businesses who have no choice.
My neighbor tells me his friends' cash flows are down. They gotta lay off people. They can't pay bonuses. These aren't growth businesses looking to expand. These are survival businesses trying to stay afloat.
When you're forced to raise prices just to pay current employees, that's cost-push inflation. That's different from demand-pull inflation where businesses raise prices because they can. This is raise prices or shut down.
And it's systematic. It's not one sector. It's cleaning businesses. Plumbing businesses. Real estate services. Every service business that interacts directly with consumers and homeowners. They're all moving together on the same timeline.
January 1st.
The Market Is Ignoring the Warning
The market's up today. The government says inflation's coming down. They point to oil declining a little bit. Eggs dropping some.
But other areas aren't coming down at all. Home prices aren't coming down. The NAR report just confirmed it. Mortgage rates are going up while home prices stay elevated.
Now you're going to layer in a new wave of price increases from the businesses that touch consumers most directly. The plumber who fixes your pipes. The cleaning service that comes to your house. The real estate agent who lists your property.
Every one of them is raising prices in eight weeks.
The market acts like it doesn't matter. Bad news, they rally. Good news, they rally. No news, they rally. You're in a video game where the market's non-reactive to everything.
That works until the fundamental assumption breaks. The market is positioned for continued disinflation. Algorithms are defending slopes based on the belief that cost pressures are easing.
None of that accounts for millions of small businesses simultaneously pushing through price increases in eight weeks.
Why Small Business Inflation Matters More
These aren't discretionary price increases. My neighbor's friends aren't raising prices to expand. They're raising prices because they've absorbed cost increases for an entire year.
They've tried to maintain pricing. They've cut where they can. They've delayed raises. They've skipped bonuses. They've done everything possible to avoid passing costs through.
Now they're out of options. They either raise prices or close.
This creates a different kind of inflationary pressure. When millions of small businesses are forced to raise prices simultaneously to survive, that's systematic cost-push inflation hitting the economy at once.
It's not isolated. It's not gradual. It's coordinated by calendar. January 1st is the deadline they've all chosen because that's when they reset annual pricing with customers.
The government can say inflation's coming down. But when the January inflation data starts printing higher again, the market's going to realize the disinflation story was wrong.
The Eight-Week Timeline
January 1st isn't a prediction. It's a deadline.
Small businesses have already made the decision. They've already told their customers it's coming. They've already built it into their 2026 planning. This isn't a maybe. This is happening.
Portfolio managers are focused on getting through December. They're defending positions for year-end reporting. Algorithms are programmed to maintain slopes through quarterly window dressing.
That programming shifts January 1st. The same day small business price increases hit. When inflation data starts printing higher again in January and February, the algorithms that defended every dip will flip to systematic selling.
The fundamental assumption underlying their programming just broke. The market was positioned for disinflation continuing. Instead, you get a new wave of inflation from millions of small businesses simultaneously raising prices.
You can wait two months and hope sector momentum continues…
…Or you can start positioning for the reversion now before the January data forces algorithms to reprice inflation assumptions.
The Genesis COG System tracks when algorithmic positioning is based on assumptions about inflation versus when those assumptions are about to break.
The system identifies when machines are defending slopes that have no support if the narrative shifts.
When January inflation data contradicts six months of disinflation assumptions, you'll already be positioned for the algorithmic flip that follows.
Click Here to see how the Genesis COG System tracks the algos that drive the market.
Professor Jeffrey Bierman
Creator of the Genesis COG System