Back to upside today as the inflation data come in better than expected. The Dow gained 176 points on about average volume. The advance/declines were better than 2 to 1 positive. The summation index is trying to turn back up. The NASDAQ led the way and that remains a plus. The S&P 500 remains short term overbought. There was no downside follow through from yesterdays slide so perhaps the rally will continue. However we remain ready to purchase the SPY August puts. The timing here will be the key as we follow our indicators and signals. Patient for now. Gold was up over $50 on the futures but that was an anomaly because the futures moved into the next quarterly cycle. The continuous contract gained $15. The US dollar was bit lower along with interest rates. The XAU rose 1 1/2, while GDX gained 1/3. Volume was light. My GDX August calls are still losers but just not as much. The potential inverse head and shoulders pattern for GDX is barely intact. We would have to see gains from here to make it valid. It will depend on what transpires next week but I'm not so sure that gold is going to rally here. The technical picture is mixed at best and I don't see a catalyst for gains on the horizon. I'll consider the path to take over the weekend. There is still 3 weeks to go in the August option cycle. However if the market turns down soon as we suspect, the gold shares will most likely follow. Mentally I'm feeling OK. The VIX dropped today and that fits with todays gains. Still short term oversold as it has been for a couple weeks. Below the 50 day moving average here as well. The VIX implies more gains for stocks at the moment. Yesterdays decline in the market appears to be a one day wonder after todays price action. But we'll see how things progress going forward. We've got the end of the month on Monday and then the beginning of August. Plenty of economic data to digest including Fridays jobs report. We'll go over the charts this weekend and try to come up with a game plan. Asia was mixed and Europe barely higher to finish the week. It's Friday afternoon and time for a break.