The Chinese equity market rose a touch overnight. The offshore dollar/yuan was flat. Gold in yuan slipped a touch.

Elsewhere in Asia, Hong Kong fell a freckle. Japanese equities rose half a percent . JGB yields fell 1 bp to 1.56%. The dol/yen rose half a percent.

European equity markets were up over a percent this morning. German 10yr yields rose 1 bp to 2.68%. The eur/dol tested yesterday's low and bounced but still ended down half a percent.

Over in the US, the equity futures were up a touch ahead of the open. The dollar was a little firmer vs. other colored paper, with the DXY testing yesterday's highs. Gold was off 30 bucks and testing yesterday's lows. Yields were little changed. Then we got the June retail sales data along with a couple other data points...

June retail sales rose 0.6 percent, which was well above the 0.1 percent consensus. Jobless claims also came in below the consensus, and the Philly Fed Index came in at 15.9 vs. a consensus at -0.4.

So, we basically got stronger data across the board, which made the reaction all that more interesting. The S&Ps firmed a little, like they always do, but the dollar index interestingly weakened after failing to punch through yesterday's highs. Gold likewise briefly pushed below yesterday's low but then reversed to the upside. Yields fell.

The S&Ps opened up a touch and grinded higher all day to go out on the best levels of the day with a gain of over half a percent.

Volume backed off to average. Breadth was 2 to 1 positive on NYSE and nearly 3 to 1 positive on the NASDAQ. New highs edged out new lows on the NYSE (108 to 20), and new highs swamped new lows on the NASDAQ (241 to 48).

Stocks Were Mixed:

Stocks were mostly higher in no particular pattern.

The XHB homebuilding ETF rose over a percent, and BLDR rose half a percent.

Positions: I made no other changes to my shorts in SPY, QQQ, MDY, IWM, ARKK, XHB, and BLDR.

Commodities Were Higher:

Brent crude rose over a percent. Natural gas fell a percent. The oil stocks were higher, with the oil and gas ETFs all adding a percent or two. The uranium equities were higher again, with the URNM adding over a percent to another new 8-month high.

Copper fell a touch and still looks toppy. Other base metals were higher, with the DBB base metals ETF adding nearly a percent. The copper stocks were lower again, with the COPX losing half a percent. The steel stocks were higher, with the SLX adding over a percent. The XME metals and mining ETF rose 3 percent.

Palladium rose 4 percent. Platinum jumped 3 percent to a new multiyear high.

Silver retested yesterday's low after the US open and then rallied for the rest of the session to go out on the highs and up just over half a percent. Silver was even stronger in foreign currencies and made a new closing high in EUR, AUD, and JPY.

The silver/gold ratio rose a percent to just shy of a new closing high for the move.

The CCI equal-weighted commodity index ETF (GCC) rose half a percent. The energy-heavy DBC commodity ETF rose a percent. The Bloomberg Commodity Index (DJP) rose half a percent.

Gold Slipped And Then Rebounded:

Spot gold slipped overnight as the dollar rebounded back up to yesterday's highs, and the metal would open in the US near yesterday's low at around $3325.

Once the retail sales data hit, the metal then plunged to as low as $3310 to mark the low for the session. From there, the metal would firm for the rest of the day to go out back near the mid-levels of yesterday's session at $3338 for a loss of just a touch.

Gold Stocks Slipped And Then Rebounded:

The GDX opened down near yesterday's low, slumped below the 50 dma and tagged the uptrend since January before then turning and rallying for the rest of the session to end well off the lows and back above the 50 dma but still down over a percent.

Nevertheless, that close would once again leave the GDX below the 5 dma, which technically leaves the bears in charge. With that said, we've obviously seen lots of swings within the range between 50.5 and 53 over the past several weeks, which is making this trending indicator extremely noisy.

The GDX/GLD ratio fell a percent to a new low for the move since the June high.

The silver stocks were a little firmer than the gold names. The SIL fell nearly a percent. The SILJ fell half a percent, and the GDXJ fell over a percent.

Real yields were lower, and nominal yields were little changed. The yield curve flattened a little per the 2/10 spread. The dollar was recovered most of the ground that it lost on the PowPow scare yesterday, but the dollar index failed to make highs. Gold once again seemed to react purely to the dollar early on, although the recovery in the metal following the post-retail sales low came without much movement to the downside in the buck, although the buck did fail to push higher on the news.

I'm not sure what's going to happen with this Trump/PowPow drama, but I'd say there's a higher probability of PowPow resigning that Trump trying to fire him. If I were him, I'm not sure why I would even want the job anymore at this point.

In the meantime, if the squeeze in the dollar has exhausted over the past two days, then we could be setting up for a pop in gold back up to the upper end of the "range" and a pop to a new high in silver as well as some sort of pop in the miners to a potential lower high, which may create a bearish divergence between silver and the miners.

After that, there could be problems if the dollar doesn't cascade to new lows, but we can jump off that bridge when we come to it.

In the meantime, I think silver has a good shot at making a new high sometime over the next several trading days.

My gold model remained at neutral.

Positions: Long AGQ and GDXU. I also added to my SLV 35 calls for Friday at 4 cents to bring my average down to 7 cents. I also bought some GDX 52 calls for Friday for 12 cents as well as some GLD 310 calls for 30 cents. Additionally, I bought the August gold contract at $3319 this morning after missing the low at $3314.50.

As always, I post all of these trades as Intraday Comments for subscribers in real time.

The Dollar Rebounded vs. Other Paper:

The dollar's squeeze tried to reignite today but then seemed to lose steam near yesterday's highs per the dollar index. The dollar index rose a third of a percent and attacked both yesterday's high and the 50 dma for a second session.

"The" BTC ETF (IBIT) fell a touch. MSTR, COIN, RIOT and other BTC derivatives were mixed.

Positions: Long IBIT (last add was to double the position on April 4th at 47.03).

Treasury Yields Were Little Changed:

Treasury yields were unch in the long end, which left the 10yr yield at 4.46%.

The 2/10 spread narrowed a little. As the curve steepens after being inverted for an extended period of time, we typically start to see things go awry in the equity market ahead of a recession (like we are now). That will bring on Fed easing eventually, which is what gold wants, but not just yet.

Yields in the Fed sensitive 2yr rose 2 bps to 3.91%. Junk debt was higher, with the HYG adding a hair. LQD, which is the investment grade corp bond ETF, rose a touch. MUB, the muni ETF, fell a touch.

To Sum Things Up:

After the close, PowPow has responded in a letter to Vought's list of questions from the White House about the Fed HQ renovations. If Trump is going to try to manufacture an issue out of this, now is his chance I guess?

REMAIN FLEXIBLE