Inflation data came in higher than expected and the markets got clobbered as the Dow fell 524 points on good volume. The advance/declines were 12 to 1 negative. The summation index is back to trending lower but it is in a sideways channel. The NASDAQ led the way down. A last half hour rally brought the market back or it would have been worse. I did place another order overnight for the SPY February puts but it wasn't filled. I was thinking yesterday that perhaps this trade was missed and it was. The negative RSI divergence on the daily chart for the S&P 500 finally came to fruition. The S&P did manage to make it back to finish on the up trend line that began last November at the 4950 level. I don't think this level will hold though but we'll see. The short term indicators for the S&P have rolled over with room to go. The next area of support comes in at around 4800 or so. If we can somehow hang around here for a while, I'll try the SPY March puts. But markets go where thay want. Gold dropped $27 on the futures. The US dollar was higher along with interest rates. The XAU lost 6 7/8, while GDX fell 1 3/8. Volume was heavy in a rush to the exits. Yesterday I thought that the gold shares were about to rally and they simply continue to fall. There is an indicator that we look at on a longer term basis that is pretty reliable to spot a point when the gold shares will at least bounce. It hasn't gotten all the way there yet but if and when it does I'll be trying the GDX March calls for a short term trade. I also thought yesterday that all the bad news was out there for Barrick Gold but it sold off on its earnings report today. Mentally I'm feeling OK despite missing the SPY put trade. At least my idea there was correct unlike the recent GDX loss that was a disastor from the start. One thing for sure in the game is that you've always got to keep moving forward despite the results. The VIX had a huge spike higher and closed above its 200 day moving average. It would have been even higher had the market not made a late comeback out of nowhere. The short term indicators have moved up but are not completely overbought yet. Not sure what to expect here next but you can certainly make a case for higher VIX readings and lower stock prices. Three days left in the February option cycle ahead of a holiday weekend. I doubt that I'll be taking on any short term trades from here but who knows? What was open in Asia was generally higher while Europe was lower. We'll keep an eye on tonights developments.