A mixed bag after todays inflation data as the Dow fell 220 points on heavy volume. The advance/declines were slightly positive. The summation index is still in a sideways channel. Producer prices came in less than expected and we had a gap higher at the open. The market spent the rest of the day selling off before a bounce in the last half hour. The NASDAQ and S&P 500 had small gains to close at record highs. The S&P continues with its short term overbought condition. I canceled my open order for the SPY September puts this morning as it did not get filled on the gap higher open. I'll reconsider placing an open order for them again overnight. However the risk on this idea increases with each passing day as we are running out of time in the September option cycle. The S&P is still hanging around its upper Bollinger band. If the market remains positive into Friday I'll probably give the puts a try. Or perhaps an overnight order will get filled tomorrow. The timing on the entry will need to be good. Gold ended pretty much flat on the session as was the US dollar. Interest rates were mixed. The XAU climbed 6 1/2 and GDX was up 1 2/3. Volume was a tad lighter than lately. GDX is overbought and staying that way. The gold shares continue to attract money as any selling quickly dries up. Not sure how far this ride will go but I will say expect some kind of sharp sell off eventually. Mentally I'm feeling OK. The VIX was a bit higher today and its short term indicators are starting to bend up. I'm still not sure what to expect from the VIX. Tomorrow is all about the market reaction to the inflation data. Asia was up and Europe mixed in last nights overseas trading. We'll keep an eye on the overnight developments.