The KOSPI tanked 4 percent overnight and back to the neckline of its 9-month H&S top (based on the 7% decline the SOX today, that neckline will break tonight), and that had US AI longs in a bad mood this morning, with the S&Ps trading off about a percent ahead of the open and the QQQ down a couple percent. Yields were also sharply lower, although the dollar was firmer, which in turned weighed on the metals.

We opened down a percent in the S&Ps and proceeded to plunge to a loss of nearly 2 percent and back to just shy of last week's low for the move as both the QQQ and SOX were hit even harder and took out their lows for the move.

From there, the S&Ps proceeded to bounce, and we managed to chop sideways near the lows for the remainder of the day until a closing bounce appeared to cut the day's loss to just over a percent. The QQQ lost 3 percent, and the SOX lost 7 percent.

Interestingly, the IWM rose a freckle, while interest rate sensitive names also had bid, including my recent BLDR long that I bought on its recent low (got lucky), which popped 7 percent.

Despite yields falling sharply and even the odds on a December rate hike falling, the dollar was still firmer, or at least it began the day that way until the DXY eventually faded to end down a freckle.

Yields plunged in both the short end and long end to new lows for the move, with the 10yr falling 16 bps.

Commodities were down across the board, except for crude, which rallied 2 percent (USO hit a new 52-week high).

Gold slipped overnight as the dollar rallied, and its plunge would continue during the US session. A bounce appeared when the dollar finally turned over and began to weaken, but sellers quickly overwhelmed it, and sent the metal sawing lower to new lows for the day. For the close, the yellow metal would go out just off the worst levels of the session with a loss of nearly 3 percent.

Silver performed even worse and would decline nearly 6 percent to a new 52-week low.

The GDX gapped down on the open and slumped to a new low for the move, where it would then chop sideways for the rest of the day to go out on the lows with a loss of nearly 6 percent.

The AI trade is continuing to come apart, and we've obviously gotten our decline in yields. The dollar, however, has yet to really crack, and I believe that's why we saw the metals be a source of funds again today. Although, it's also possible that they simply saw spillover liquidation. That obviously wasn't the case with the small caps in the IWM though, or interest rate sensitive names like the homebuilders and building materials. Thus, I suspect it had more to do with the dollar's firmness, which may be some muscle memory from asset price liquidations of the past.

The dollar, however, should follow yields soon, and that should unleash a slingshot to the upside in the metals. Interestingly, we already have some big RSI divergences in the metals and miners on both the daily charts and the hourlies. So, that slingshot could even be very close to happening.

But let's say things keep sliding tomorrow in the metals and miners despite tech continuing to collapse and yields plunging again. If so, then that may be an indication that it's going to take a nod from the Fed to really sink the dollar. Thus, that may then set the stage for Warsh to hint at no rate hike in December at next week's FOMC, which won't help the AI trade but it most certainly will help the metals and miners as the dollar plunges along with the short end of the yield curve.

My gold model may have moved back to a Tier 3 BUY but I don't have all my data in yet. I will post the reading in the AM's Morning Note for subscribers.

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

Metals: Long GDXU, AGQ, and SHNY.