The Fed Funds Futures market is now pricing in an 80% probability of a March rate hike from the Federal Reserve:

The stock market winning streak has no doubt helped to increase this probability in the last couple of weeks, along with somewhat hotter than expected inflation data.

The increase in rate hike probability has weighed on precious metals starting with the large downside reversal in the gold miners on Monday. Gold is still only 2% off its Monday morning peak at $1265 and we will have to see if minor support near $1240 will hold up or if we will need to head down to test a much bigger level at $1220.

Finally, intraday volatility in equities has continued to plumb lower depths with S&P 500 realized intraday volatility reaching an all-time low yesterday:

​I continue to be of the view that we are in for a major spike in volatility during the April/May time frame, however, we will have to be patient and survive until then. Patience is a virtue in markets, and everything else in life. Remain patient and preserve capital until better market opportunities present themselves. Remember that the market is a no-called strike game as Warren Buffett famously says, you don't have to swing until you're ready.


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