The S&Ps opened down about half a percent after the KOSPI took a header again overnight, with the SOX leading the way to the downside to the tune of about 4 percent. Oil was also up about 7 percent after Trump vowed to retaliate for the Iranian missile attack on Jordan overnight.

After hitting a low with a loss of over a percent shortly before noon, the S&Ps began to rally.

Promptly at Fed time, we got the FOMC decision, which was once again to do nothing. As for the reaction, the S&Ps popped a little. The dollar weakened. The short end of the curve fell a lot in yield, while the longer end fell less. Gold and silver, which had interestingly already moved into positive territory even before the FOMC popped to new highs for the day.

As Warsh yapped, we got another surge to the upside in the S&Ps as well as gold and silver as the dollar weakened. Yields, however, were a little more sticky, especially in the long end.

When we finally rolled around to the final hour, Warsh had said nothing remarkable, and everything began giving back gains (except for foreign currencies) as the long end of the curve surged to new highs for the day in yield and steepened the curve.

For the close, the S&Ps would collapse to new lows for the day and pretty much went out on the worst levels of the session with a loss over over a percent and a half. The SOX lost over 5 percent, and the QQQ lost over 2 percent. All three made new lows for the month.

The dollar went out pretty much on the lows with a loss of about half a percent in the DXY. Meanwhile, the 30yr yield made a new 52-week high as the 2yr lost 2 bps. In other words, the curve steepened. Got inflation?

BTC lost a touch, which isn't much considering the beating that tech took.

Commodities all surged on the FOMC but then gave a bunch of those gains back, except for crude which went out pretty much on the highs with a gain of 7%.

Gold dipped to $4000 ahead of the FOMC and then turned higher and surged up to $4050 ahead of the statement. When the statement hit, the yellow metal surged again, blew through its 6-month downtrend and printed as high as $4120 before then rolling over and sliding with the S&Ps in the final hour to give back a good chunk of its gains but still ending higher by half a percent at $4068 and back pretty much right on that downtrend line.

Silver similarly slipped before the FOMC but was firmer and eventually popped up to its downtrend since late May and then reversed to end well off that high but still up a touch to nearly $58.

The GDX hit its low ahead of the FOMC with the metals and then popped on the FOMC and eventually traded up to within pennies of its high for the week before then reversing to end back in the middle of the day's range with a loss of nearly a percent. That close also put the GDX below the 5 dma for a second session, which is pretty much the limit for a head fake. So, the bulls need to take charge tomorrow, or they may have some problems.

The bond market gave a clear thumbs down on the Fed's punt today, and I found that interesting. The good news for metals bulls is that a steepening yield curve is typically bullish for metals.

I look at the pop in gold and silver today as a sort of "trial run" at taking out their downtrends and surging to attack the highs for the month, which I believe is still coming over the next two sessions.

The market is very short, which we can see in the nearly 3 percent surge in gold OI yesterday when gold sold off. The pre-FOMC rally in the metals smacks of a market that is too short also. It's not until important levels are taken out, however, (like these downtrends everyone is watching) that shorts typically are going to cover in earnest and new longs are going to pile in, because after all, selling every rally attempt has worked for 6 months. So, let's see if we get that surge overnight through the downtrends as the dollar likely continues to weaken in the wake of a Fed that is "all hat and no cattle" to anyone paying attention.

If we do get that surge, it can likely set up a push into month-end on Friday.

Tomorrow we'll get the government's first guess at Q2 GDP and the silly PCE, which will no doubt be just like the CPI and "non-inflationary."

My bet is we are about to see a broad commodity rally, where gold and silver rally with crude as the dollar weakens in the wake of a Fed that people are calling BS on. Time will tell, but that's the setup in my view.

Gold and silver have been weakening as crude has rallied and pushed up inflation expectations because the market (wrongly in my view) assumed the Fed would hike and fight inflation. After today's punt, that assumption should change.

My gold model remained at neutral.

Positions: Short SPY, QQQ, MDY, and IWM. Long IBIT, STRC, and DBA.

Metals: Long GDXU and AGQ. Long SLV 56 calls, and I added some of the 55s today for 9 cents ahead of the rally starting.

Stay flexible my friends...