Before the open we got the CPI, and surprise surprise... it was right inline with the consensus. The reaction in the fed funds market was to push the odds of a rate hike next week to over 70%.

The S&Ps initially dumped but then recovered almost immediately and began moving higher. The dollar similarly popped and then gave it all back. Yields popped and then came in. Gold and silver dumped but then immediately recovered also. The key thing to remember was that crude oil slipped about 5 percent overnight on hopes for a miracle out of a meeting between the Gulf states and Iran on Monday, which is why I believe we saw the reaction we did and not because of the CPI.

Thus, just as the PPI didn't cause everything to tank yesterday, the CPI didn't cause everything to bounce today. It was oil, again.

The S&Ps opened up about half a percent and quickly squirted up to a gain of about a percent before eventually slipped some from the highs in the afternoon to go out near the better levels of the day with a gain of just under a percent.

The dollar initially slipped in the wake of the CPI but then recovered as the day wore on to eventually go out with a gain of a freckle per the DXY.

BTC bounced a hair.

Yields initially came in on the CPI but then moved higher all across the curve, especially in the short end, which further flattened the curve.

Commodities caught a bounce for the most part, except for crude, which slumped about 5 percent on hopes for a miracle at a meeting to be held on Monday between the Gulf states and Iran. Good luck with that one.

Gold and silver bounced on the CPI and then slowly gave those gains back to close off the highs but still up half a percent and just over a percent respectively.

The GDX opened higher and then reversed to go out near the lower levels of the day and below the open with a gain of just over a percent. The SILJ notably lost half a percent.

Gold, silver, and the GDX all closed below their 5 dma, which leaves the bears statistically in charge. We also now have fairly ugly little H&S tops on both gold and silver that project back to the lows.

As we saw on Thursday, it's oil and bond yields that are driving the bus and not so much the Fed. I suspect what crude does early next week is going to matter more than the Fed's rate hike and whatever body language Warsh gives about another hike.

If we do see the metals and miners decline ahead of the FOMC due to a further spike in oil in yields, the setup will be there for a potential rally on the FOMC, but again, I think that requires a decline into the FOMC in order to set it up.

That setup is likely the same for the S&Ps too, where a decline below this week's low is likely to open a trap door, but a rally may then setup post-FOMC.

My gold model remained at neutral but another beating early next week could take it to a Tier 3 BUY, which has been good for timing lows ahead of rallies all year.

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

Metals: I bought the SLV 55 puts for Wed for 17 cents.