Oil and yields took off again overnight, and that had the S&Ps and everything else not nailed down under pressure even before we got the PPI data.

When the PPI data came in pretty much inline with the consensus and failed to bail everyone out (fed funds futures moved to a 70% chance of a hike next week), the S&Ps took another leg down, as did silver and gold and other commodities except for oil.

The S&Ps opened down about half a percent and spent the rest of the session in a sideways chop to go out pretty much exactly where we opened with a loss of just over half a percent.

The dollar was firmer, with the DXY adding a third of a percent. The euro fell a touch in the wake of the ECB hiking 25 bps, and the dol/yen went against "the house" (Bessent) to the tune of half a percent.

Yields soared to new highs all across the curve, with the 10yr popping 12 bps to 4.96% and just shy of the 2023 high of 5.02%. Yields overseas surged too, so this isn't just a US thing, and it had nothing to do with the PPI. The 30 yr auction today was actually a pretty good auction too, and the Treasury's buyback went off at just over $5 bln, which was also a snoozer.

Commodities were down across the board, except for crude, which surged 7 percent to a new high for the move since the low (USO soared to a new high). Copper tanked 5 percent. Platinum tumbled 6 percent, and palladium slumped 5 percent.

Gold tumbled overnight as yields and the dollar took off, and the yellow metal tumbled another $35 in the wake of the PPI to as low as $4325. Following a bounce, the metal collapsed again to new lows for the day and to as low as $4315 as crude and yields made new highs. For the close, we pretty much went out on the lows at $4315 with a loss of nearly 2 percent.

Silver similarly slipped overnight and then tanked after the PPI. Following a bounce, the white metal then tumbled to new lows to go out on the worst levels of the day at around $63.50 for a loss of over 5 percent.

The GDX gapped down on the open, and after a brief bounce that failed to fill the gap, the GDX slipped again to go out on the lows with a loss of over 3 percent.

As I've said before, closing above the 5 dma in the metals and miners is statistically bullish but is not a guarantee of that outcome, and today is a perfect example of the low probability event happening.

Today's close now leaves gold, silver, and the GDX all below the 5 dma, which puts the bears in charge. We also have some potentially pretty ugly H&S tops in silver and gold.

All eyes now turn to the CPI tomorrow, but I seriously doubt that a cool number is going to change much except for maybe provide and excuse for some oversold conditions to morph into a bounce. Yields and oil weren't moving on the PPI today, and they are the reason that markets and the metals took a header, not because of fear of the Fed.

MY gold model might have moved to a Tier 3 BUY, which is normally good for a bounce even during a selloff. Once I get the rest of my data in, I will post it for subscribers in tomorrow's Morning Note.

Positions: Short SPY, QQQ, MDY, and IWM.

Metals: I dumped GDXU and AGQ on the open, and I also bought the SLV 56 puts for tomorrow for 12 cents after the metals bounced. After seeing the SLV 57 and 58 puts that I bought yesterday move 10x+ and the one's I bought a few hours before double, I decided to sell all of them. In my experience, 10x returns on options in 24 hours are when you have to take profits, especially with an expiration a day away. A bounce tomorrow would make these all donuts.

Let's see if we get some sort of oversold bounce tomorrow in the metals and miners. If we do, it's probably a sale, because I suspect they're going to be under pressure right up until the Fed hikes next week. And yes, I do think the Fed will hike now, because that's where the fed funds futures market is. They won't fade it. Thus, I was wrong.

Stay flexible my friends...