The S&Ps opened up a touch while everyone waited for Warsh's speech to hit the tape. Promptly at 10 ET, we got the speech, and it spent a lot of time on inflation and the fact that it was still a problem. As we've seen with Warsh, there was no hint at how he might deal with that (i.e. - rate hikes). So, people were left to use their imaginations.

The odds of a rate hike in September quickly shot up to 50%. The dollar spiked along with yields, especially in the short end. The S&Ps slipped just a little but then began to recover. Gold and silver collapsed and then tried to bounce before tumbling even lower as stocks turned over (more on that below).

The rebound in the S&Ps took things positive on the day, but the rally would flame out around mid-morning. Once we rolled over, the ensuing slide would take us down into slightly negative territory, where we flop and chop on the lows for the rest of the day to go out near the lows of the session with a loss of just a touch.

The dollar was higher across the board, with the DXY adding half a percent. Yields jumped 13 bps on the 2yr and 9 bps on the 10yr, which flattened the curve.

BTC slipped over 3 percent.

Commodities were mostly lower, including oil, which fell a touch.

Gold hung around $4600 overnight and briefly spiked on the release of Warsh's speech before then rolling over and slumping to $4530. Following a bounce back up to around $4580, the metal then rolled over again as the S&Ps sold off and the dollar and yields continued to move higher. After briefly trying to stabilize around noon, the metal would slip again in the afternoon to eventually go out near the worst levels of the session with a loss of over 3 percent to $4554.

Silver fared better overnight and popped a couple percent to a new high for the move and to as high as $71, but when the Warsh speech hit the tape, silver reversed sharply and plunged to $68.5. After a small bounce, the white metal then collapsed to nearly $66, which was also basically where it closed with a loss of over 4 percent.

The GDX opened flat and chopped around near the unchanged mark. Once the speech hit, the GDX collapsed with the metals, and after a small bounce, it would make new lows just like the metal to go out on the lows of the day with a loss of 4 percent and just below the 10 dma.

Obviously, gold, silver, and GDX all closed below the 5 dma today with authority, which puts the bears firmly in charge.

I was afraid of something like this given the rip that we've seen all month. It simply made profit taking a high probability if and when momentum finally failed, and it clearly failed today. Month-end profit taking then took over, and we could even see some more on Monday. From there, I would expect some sort of bounce, but I suspect this correction is going to fill a lot of the gaps on the charts in GDX, GLD, and SLV that we've left over the past month. That doesn't mean they will all get filled, because some are probably breakaways, but a pullback to the 50 dma, for example, will certainly fill a lot of them.

Now, I'm assuming this will just be a correction, but as I've said all along, it's possible that this rally was simply another bear market rally. The fact that so many bulls cited the so-called "QE" by the Treasury, which was nothing of the sort, as the catalyst for the rally makes me a little suspicious. After all, a strong bounce was warranted regardless given the nonstop slide since May.

The Fed is going to have to be the one to provide liquidity if gold and the miners are going to take off again. And perhaps the market is anticipating that the Fed will continue to do nothing in the face of rising inflation, which is also enough to spark a rally, but that sort of Fed outcome was obviously not today's business. It was quite the opposite in fact.

My gold model remained at neutral, and it appears the several days of a Tier 1 SELL at the highs was all the warning we got of today's impending reversal and the ensuing top that was left.

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

Metals: I embarrassed to admit that I briefly tried to get long silver and the miners before the Warsh speech thinking that people would simply chase the trend again in response to a nothing burger speech, but as things reversed, I was stopped out almost immediately. I wish I had held on to my SLV 61 puts that I sold yesterday, because before trading down to 2 cents this morning they would end at over a dollar, which was about 10x what I sold them for yesterday. That's a reminder that sometimes the market can be VERY tricky.

For example, the 5 dma "tell" is not a rule, but a merely a trending guide. As with everything, it is merely a reflection of probability, but occasionally, it can give you a head fake.

Stay flexible my friends...