Home Business Game Of Chicken

Game Of Chicken

When you purchase through our sponsored links, we may earn a commission. By using this website you agree to our T&Cs.

FOMC minutes didn‘t reveal fresh hawkish tunes, but markets were caught off guard – unlike 3 weeks ago during the statement and press conference. It‘s as if S&P 500 and pretty much everything else woke up to the hawkish reality only now. In spite of the new liquidity powered Santa Claus rally, the sudden realization that the March Fed meeting might very well bring in a first rate hike, forced a sharp downturn across the board.

Get The Full Henry Singleton Series in PDF

Get the entire 4-part series on Henry Singleton in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q3 2021 hedge fund letters, conferences and more

The dollar wasn‘t too affected by the daily rise in yields that hit junk bonds particularly hard. The yield curve keeps being compressed, and is getting closer to the point of inversion. The likely good employment data on Friday would provide the Fed with a convenient cover to embark on and keep pursuing the tightening route. Not that it would have the power to break inflation (even at the professed very accelerated tapering pace – let alone the relatively measly hikes when CPI, PPI or PCE deflator are considered) – this game of chicken with the markets risks a tantrum that could bring up the „fond memories“ of Dec 2018.

Yes, the risks of crashing the airplane would grow up over the coming weeks and months – the Fed is walking a very tight rope indeed. Markets are spooked, and the coming days would show whether this is already the start of something worse, or whether we can still shake it off and continue upwards till the Olympics. I‘m still leaning towards the latter.

Anyway, good to have closed the profitable S&P 500 and crude oil positions in time.

Let‘s move right into the charts (all courtesy of www.stockcharts.com).

S&P 500 and Nasdaq Outlook

S&P 500

Tech understandably declined more than value – thanks to yields. S&P 500 bottom might not yet be in really. Bonds and tech need to stabilize first.

Credit Markets

Credit Markets

HYG is still holding the key, and would provide an early turnaround sign. The plunge in LQD isn‘t looking short-term encouraging in the least – the dust hasn‘t yet settled.

Gold, Silver and Miners


Gold and silver still haven‘t left the sideways consolidation pattern – the white metal would be more affected through the inflation taming fears. That‘s though a premature calculation as inflation might turn out less amenable to be put down fast.

Crude Oil

Crude Oil

Unlike practically everything else, crude oil recovered strongly from the FOMC-induced setback – and certainly looks like the strongest of the pack at the moment.



Copper gave up advantageous position, and isn‘t really following (energy-led) commodities up yet. The long sideways consolidation is testing the bulls‘ resolve even as the pressure to go higher is building up. The same for silver, by the way.

Bitcoin and Ethereum


Bitcoin and Ethereum clearly lost the remainder of the bullish posture – it‘s turning out they aren‘t ready to defy the shrinking global liquidity.


S&P 500 bulls look to get under some more pressure before the repeated hawkish message gets absorbed. The bond markets coupled with the dollar would reveal just how serious the bulls are about buying this dip and now. My bet is that they would remain shaken, and looking hesitantly for a floor. If there is one overarching message from yesterday, it‘s that the hawkish Fed appreciation has been woefully misapprehanded, and if followed through on in its entirety, would lead to a dangerous game of chicken with the markets (we aren‘t there quite yet).

Thank you for having read today‘s free analysis, which is available in full at my homesite. There, you can subscribe to the free Monica‘s Insider Club, which features real-time trade calls and intraday updates for all the five publications: Stock Trading Signals, Gold Trading Signals, Oil Trading Signals, Copper Trading Signals and Bitcoin Trading Signals.

Thank you,

Monica Kingsley

Stock Trading Signals

Gold Trading Signals

Oil Trading Signals

Copper Trading Signals

Bitcoin Trading Signals


[email protected]

All essays, research and information represent analyses and opinions of Monica Kingsley that are based on available and latest data. Despite careful research and best efforts, it may prove wrong and be subject to change with or without notice. Monica Kingsley does not guarantee the accuracy or thoroughness of the data or information reported. Her content serves educational purposes and should not be relied upon as advice or construed as providing recommendations of any kind. Futures, stocks and options are financial instruments not suitable for every investor. Please be advised that you invest at your own risk. Monica Kingsley is not a Registered Securities Advisor. By reading her writings, you agree that she will not be held responsible or liable for any decisions you make. Investing, trading and speculating in financial markets may involve high risk of loss. Monica Kingsley may have a short or long position in any securities, including those mentioned in her writings, and may make additional purchases and/or sales of those securities without notice.

Our Editorial Standards

At ValueWalk, we’re committed to providing accurate, research-backed information. Our editors go above and beyond to ensure our content is trustworthy and transparent.

Monica Kingsley

Want Financial Guidance Sent Straight to You?

  • Pop your email in the box, and you'll receive bi-weekly emails from ValueWalk.
  • We never send spam — only the latest financial news and guides to help you take charge of your financial future.