Sometimes the market doesn't act rational. Today was one of those times. The Dow got clobbered when the inflation report came in hotter than expected. The most watched index fell 1276 points on average volume. The advance/declines were 8 to 1 negative. The summation index has turned back lower. Not sure if the summation index will track sideways or start heading down to the zero line. The NASDAQ led the way lower and lost over 5%. Major markets opened with a gap lower and traveled down for much of the session. The S&P 500 is close to the support at 3900. What happens there will tell the story as 3900 is the line in the sand for the bulls. It is expiration week so anything can and will happen. My SPY September puts are in the black. Now the question is when to sell them. I suppose we'll keep an eye on the 3900 level and take it from there. The stop loss order has been modified to lock in a profit if the market turns back up here. Gold was off over $25 on the futures. The US dollar resumed its climb higher as did interest rates. The XAU fell 4 1/4, while GDX lost a point. Volume was good to the downside. The short term indicators have moved lower for GDX. However the gold shares, despite todays losses, held up rather well. My open order for the GDX October calls remains in place. Mentally I'm feeling OK. The VIX jumped and is back above its 200 day moving average. The short term indicators here are mixed. We closed at the recent highs for the VIX at 27 and change. Yes, it could go higher but whether or not it does is the question. Only 3 days left in the September option cycle. We'll get producer inflation data tomorrow and I don't think it will be viewed like the consumer numbers today. I could be wrong. Retail sales and other data due Thursday. The market will have plenty of excuses to go one way or the other. However after todays debacle it will be hard to see a quick turnaround for stocks. But anythings possible in this game. Asia was up and Europe down in last nights trade. We'll keep an eye on the overnight developments.