Sellers took over the day as the Dow fell 526 points on heavy volume. The advance/declines were 3 to 1 negative. The summation index is back to tracking sideways. The inflation data came in a bit worse than expected. We sold off early, made it all the way back to unchanged and then fell apart. The S&P 500 is still short term overbought on some of the indicators despite todays drop. The NASDAQ was the leader to the downside. I sold the SPY February puts that I purchased yesterday early in todays session for a 40% gain. It proved to be the wrong move as they were worth much more by the close. This trade had a good entry and a lousy exit. I may consider trying the puts again next week ahead of the wholesale inflation data. Gold dropped $9 on the futures. The US dollar bounced around but finished higher. Interest rates climbed again with the ten year treasury now north of 2%. The XAU fell 3 1/3, while GDX lost 7/8. Volume was good to the downside. I'm still considering the GDX February calls but there's only six days left in the February option cycle. However I could also make the case for sitting out until there is a better technical entry point. Mentally I'm a bit disappointed for getting out of the SPY put trade so early. But at the time it looked like the early stock decline was not going to hold. But it did and ended up going lower. That trade is over and must be put behind as the markets will keep moving. Other opportunites will follow. The VIX spiked higher as the 20 level held. It is back above its 50 day moving average. The short term indicators for the VIX have turned back up. If the indicators continue higher, the VIX will climb and the market will fall. I'm not quite that sure that will be the case this time around but we'll see as time goes forward. We do still have a down trend line that remains in effect for the S&P and other indices as well. Asia was higher and Europe mixed overnight. We'll see if we get any downside follow through and close out the trading week tomorrow.