Inflation data came in where expected and the Dow rallied 220 points on light volume. The advance/declines were 2 to 1 positive. Once again the summation index is trying to turn back up. The S&P 500 sported a gain but the NASDAQ was in the red again. The Dow leading the way is usually a late stage of the rally affair. I suppose that I was lucky none of my SPY August puts tickets got filled. I still might try this idea because the S&P cannot stay short term overbought forever. However I may have to be patient and wait for the September option cycle. Risk increases in the August cycle as the days begin to dwindle. Light volume is a product of the summer but cannot be trusted nonetheless. Gold rallied as inflation didn't go above estimates. The December futures were up over twenty bucks. Interest rates finished little changed while the US dollar was lower. The XAU was up 3 1/4, with GDX gaining 2/3. Volume was good. The gold shares hit short term oversold and have begun to bounce. I'm not sold on the idea that this will be a long rally since the fundamental picture for gold at the moment is negative in my mind. GDX is oversold both short and medium term however but I'd rather wait and see if it can get down to 31. That's the game plan here for now. Mentally I'm feeling OK. The VIX was lower, remains short term oversold and below its 50 day moving average. It implies more rally to come for stocks. Perhaps things will simply run up into the August expiration. That would set up the SPY September puts. All wishful thinking on my part. But I really think we're overdue for some type of extended move down. Seasonality favors such a move as well. However the grind higher continues. Europe and Asia were generally higher overnight. We'll watch the reaction to tomorrows inflation data and go from there.