Before the open, we got the CPI report, and it came in exactly inline with the consensus on the headline at a 3.7% annual clip and slightly hot on the core at 2.6% vs. a 2.5% consensus.

As for the reaction, yields and the dollar soared. Equities were pounded, and commodities and precious metals were hammered.

The S&Ps opened down about half a percent and proceeded to saw lower for the remainder of the morning and most of the afternoon until a small bounce finally appeared in the final hour to cut the day's loss to over a percent. Once again, AI trash was hit even harder, with the QQQ and SOX losing 2 and 4 percent respectively.

The dollar soared initially but then reversed have of those gains per the DXY by the close to end up a third of a percent to a new 52-week high. BTC fell 2 percent.

Yields also soared initially, but by the close, yields all across the curve were DOWN, as were real yields per ETFs such as TDTF and TIP. Corporate bond ETFs, like LQD, were also higher on the day, which means their yields fell as well. Odds of a rate hike in October remained at around 30% by the close.

Commodities were spanked across the board, except for crude, which rose a third of a percent.

Gold and especially silver were spanked initially, and while gold did manage to hold its recent low of a week ago and recovered much of its losses to end back over $4100 for a loss of over a percent, silver collapsed back to its July low and basically sat there until the close to end down over 6 percent. The silver/gold ratio also took out its February low to make a new 52-week low.

The GDX gapped down and then plunged to take out its low of last week, and while it did cut its losses a little into the close, it still ended down over 4 percent.

All the metals and miners ended below the 5 dma, which leaves the bears firmly in control. With that said, some of the declines have become so extended at this point, that a short covering rally is probably overdue, especially given that Silver is back at its low for the year, where double bottom buyers may wade it at least for a try.

I can't really explain why the metals overreacted the way they did given that the bond market clearly didn't, but it's a little weird to say the least.

As you will see below, I dumped my metals longs on the open simply as a risk control measure, but I may well regret those sales tomorrow. Speaking of, tomorrow we'll get the PPI, retail sales, and an appearance by Warsh.

My gold model moved back to a Tier 3 BUY.

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

Metals: Moved to flat except I did buy a few SLV 52 calls for Friday for 14 cents and some GDX 87 calls for Friday for 17 cents in today's final hour.