Markets seemed a little lost today. SPX opened positively this morning, but then quickly dove into the red, traded slightly upward for the balance of the day, and then deteriorated from about 2 pm ET through the close. SPX gained $3 to close at $1669 while RUT closed at $999, up $1. Trading volume bumped up a little from yesterday but remained below average. Trading in the S&P 500 rose to 2.3 billion shares and trading on the NYSE was up 6%. Volume on NASDAQ rose 2%. Volatility rose a touch with the VIX closing up 0.4 points at 13.4%. It is too early to be conclusive, but the SPX chart of the past few days seems to be treating $1670 as resistance; a similar pattern is emerging with RUT tentatively trading above $1000, but then pulling back.

Traders seem to be obsessed with any news, rumors, or even baseless speculations concerning the Fed scaling back its quantitative easing. I think it is evidence of the market finding itself in new territory, i.e., a strong bullish trend with minimal underlying economic support. Yes, one can point to good corporate earnings, but we all know the macroeconomic data remain weak. Companies aren't posting good earnings by expanding and hiring. Traders know the picture is flawed and they are spooked by the idea of the Fed pulling out and the markets having to stand on their own. Perhaps that is a problem with the entire country with more and more people feeling they must depend on the government.

My Jun condor position on the Russell 2000 Index remains hedged with a P/L of -$2,850 with position delta = -$13 and position theta = +$77. Be careful about adding more capital to positions until after the Bernanke testimony and the release of the FOMC meeting minutes tomorrow.

The SPX opened this morning and started another relentless climb higher, peaking at $1673 around noon ET. But then it bled off all of those gains and went into the red, dropping to $1664 by 2 pm ET. It recovered most of that by the end of trading, closing at $1666 for a loss of one dollar. RUT fared a little better, with a $2 gain at $998, but those gains came in the last 4-5 minutes of trading. Trading volume was down significantly with 2.1 billion shares of the S&P 500 trading.  Trading volume was lower by 5% on both the NYSE and NASDAQ. VIX popped up a half point to 13.0%, still a low value historically.

There wasn't much economic news today. The Chicago Federal Reserve Bank released its national activity index that measures manufacturing activity. It decreased to a -5.3 for April from the previous month's -2.3, with negative numbers indicating contraction. This is consistent with other similar manufacturing surveys of the past few months. The stock market going higher every day causes us to forget that the economy is still struggling.

I rolled the 1020/1030 call spreads in my RUT Jun condor to 1030/1040 this morning, and, of course, then the market pulled back. This position now stands at a loss of -$2,530 on 20 contracts with delta = -$7 and theta = +$66. We still hold the July 1000 calls as a hedge. This condor still has the potential to make a nice profit if the index levels out or pulls back from here, so our rolls and hedges have served their purposes.

Traders are focused on Bernanke's testimony before Congress on Wednesday, so tomorrow's market may be very quiet.

Consumer sentiment data appeared to give the market a boost today and resumed the uptrend. SPX closed up $16 at $1666. RUT increased $11 to close at $996. VIX lost almost a percentage point to close at 12.5%. Trading volume was mixed with a slight decrease in the S&P 500 to 2.5 billion shares, but a 17% increase on the NYSE. But on the other hand, trading volume fell 7% on NASDAQ.

The University of Michigan consumer sentiment data jumped up in May to 83.7, significantly higher than April's 76.4. Leading economic indicators were released for April and were up 0.6%.

RUT settled at $989.53 today, so the remaining put spreads in my May condor will expire worthless this weekend, resulting in a 10% gain. This brings the Flying With The Condor™ service to break-even for 2013 (making up for the Jan loss). My Jun position stands at a P/L of -$2,670 with position delta = -$44 and position theta = +$76.

Have a great weekend.

The market opened weakly this morning, then climbed to an intraday high around 1 pm ET and then lost almost all of its gains only to recover most of the gains in the last hour. You may wonder - what's my point? Traders continue to come in and buy any weakness; it isn't hard to find nervous traders - nearly everyone is on high alert for a correction. But it is also true that  no one wants to miss out on any more of this bull market. SPX ended up $8 higher at $1659 and RUT gained $3 to close at $989. Trading volume was essentially flat with 2.4 billion shares of the S&P 500 trading; trading volume on the NYSE rose 4% and trading on NASDAQ was up 1%.

There was a large amount of economic data released today, but most of it was mediocre to poor. Perhaps that explains the early weakness in the markets today. The Producers Price Index (PPI) decreased 0.7%, but the Empire Manaufacturing Survey dropped from +3.1 to a negative 1.4. Industrial production for April declined 0.5% and capacity utilization declined a half percentage point to 77.8%. The only bright spot was the NAHB Housing Market index that increased 3 points to 44 for May. One of the bizarre aspects of this particular bull market is that poor economic news is often seen as bullish simply because it means the Fed will continue its stimulus programs.

My Jun condor position on RUT is largely unchanged at a P/L of -12% with a position delta = -$8 and position theta = +$73. The position is still hedged but I have rolled the call spreads higher. As you can see, the position is delta neutral with a large positive theta, so we are in pretty good shape.

There was an enormous amount of talk about the old "Sell in May and Go Away" adage on CNBC for the past few weeks. Needless to say, anyone who followed that advice is very disappointed, as the market has simply continued on a tear upward almost without even a slight pause and certainly no correction. A pullback or correction is always possible, but so far I have lost money on the puts I have bought as insurance on my stock portfolio.  SPX closed at $1650, up $17 today and RUT ran up $12 to close at $986. RUT closed at its high for the day - very bullish behavior.

It appeared like David Tepper’s comments on CNBC this morning set the tone for today’s bullish run. Trading volume spiked up today, but barely made it to the 50 dma. Trading in the S&P 500 has not exceeded the 50 day moving average even once in May. Just under 2.4 billion shares of the S&P 500 traded today and trading volume increased 19% on the NYSE and increased 11% on NASDAQ.

Market bears have been pointing to the lower trading volume as a warning sign on this market. Traditional bull markets occur on higher than average trading volume and today's spike upward in volume matches that historical tendency. But daily volumes above the 50-day moving average in this bullish run have been relatively rare and so the average is actually declining.  When one considers how many individual investors have been spooked and have left the markets since 2008, perhaps this low volume isn’t surprising.

VIX is currently at 12.85%, a historically low level. This morning, VIX rose as the markets traded upward – an unusual divergence. This could be a result of continued high volume of puts being bought as this market hits new highs and correction concerns abound. Many institutional traders see these low levels of volatility as an opportunity to buy inexpensive insurance on their portfolios. Or it could be that the bulls are loading up on SPX calls.

The PPI will be announced tomorrow. That may raise the debate about inflation, but I doubt it will derail this market. It appears like it will require an extraordinary surprise of some kind to even give the bulls a pause.

My June iron condor position on RUT stands at a P/L of -$2,670 or -12% with delta = -$11 and theta = +$71. I closed the 820/830 put spreads today and rolled them up to 890/900. These adjustments have retained a nice potential gain for this position, assuming (big assumption) the bulls' truck slows down a bit.

The markets traded down a bit this morning in spite of good retail sales data, but then recovered to close very close to the closes of the past 4 days.SPX closed unchanged at $1634 and RUT lost $1 to close at $974. VIX was unchanged at 12.6%. Trading volume fell off with 2.0 billion shares of the S&P 500. Volume on the NYSE was down 7% and trading volume in the NASDAQ was down 5%.

So all indicators remain rather positive and this will be a light economic data week, so a continuation of the bullish trend seems most likely. The CPI and PPI data later this week could possibly bring more debate about the Fed's policy and inflation, but there are no signs that the price data are likely to spike upward.

My Jun iron condor on RUT stands at a net P/L of -$2,160 with delta = -$15 and theta = +$52. The July hedges remain in place.

Through about half of today's trading, the S&P 500 Index (SPX) was down or flat, but the Russell 2000 Index (RUT) was always in positive territory and just advanced even higher as SPX moved into the black in the afternoon. SPX ended up $7 higher at $1634 and RUT gained $9 to close at $975. But trading volume declined with 2.1 billion shares of the S&P 500 trading and volume on the NYSE dropped 8%. Trading volume on NASDAQ decreased 7%. Seeing RUT leading the SPX is very bullish - the classic definition of "risk on". But lower trading volume continues as a hallmark of this bullish market. This certainly is atypical of strong bull markets.

VIX dropped a half point to 12.6%. There was no economic news of any consequence today.

I closed my RUT May 1010/1020 call spreads today in accordance with my Two Sigma Rule. The 1010 call was 1.9 standard deviations OTM this morning. It was borderline whether to close the call spreads this morning, but the decision appeared more and more correct as the day wore on. That confirms a 9% gain for my May condor, assuming the 840/850 put spreads expire worthless next weekend.

I opened the June iron condor on RUT at 820/830 and 1000/1010 for a credit of $1.50 on 4/24 and hedged with the July 1000 calls on 5/3. Today, I closed the 1000/1010 call spreads and rolled them up to 1020/1030; I left the July hedges in place. This position still retains the potential of a gain of around 5.5% if everything goes well for us - wishful thinking perhaps. But that is the point of hedging: keep the losses in check and buy time for the market to flatten out or pull back.

This bull market is certainly persistent. It is fascinating how many of us traders are wary of it. One of the guys on CNBC today said this was the "most hated bull market" on the exchange floor he had ever seen. It makes traders nervous to be investing in a market that is largely being held up by the Fed.

Enjoy your weekend.

The major market indexes didn't tack on more gains today - how about that? But the averages didn't drop much either; this bullish trend is still very much alive. SPX dropped back $6 to close at $1627 while RUT lost $4 to close at $966. The VIX added a half point to close at 13.1%, still relatively low. Trading volume was relatively flat with 2.3 billion shares of the S&P 500 stocks trading. Trading on the NYSE was down 3% while trading volume on NASDAQ was up 5%.

The unemployment claims came in this morning at 323k, down four thousand from last week. Continuing claims dropped 27k, but these decreases are small percentage changes; the data trend lines are basically flat, so the market didn't celebrate.

The new support level for SPX is now $1600, so it would take a pretty significant drop to really get traders' attention. The comparable support level for RUT is much closer at $955. Many market analysts feel a correction of some kind is overdue, but so far that has been a futile waiting game. I think three main factors are driving this market: 1) The Fed's QE policies, 2) Reasonable corporate earnings growth, and 3) A search for income in dividend paying stocks for traders leaving the bond market.

My May iron condor on RUT stands at a net gain of $1,560 or +9% with position delta = -$37 and position theta = +$125. I will apply my Two Sigma Rule tomorrow to this position. Unless the market opens down quite a bit tomorrow, I will probably be closing the 1010/1020 May call spreads; those spreads are just inside of two standard deviations today. So the bull market game continues. As soon as the last of the bears are vanquished, the correction will begin!

The markets sputtered a bit at the open this morning, but the bulls quickly reclaimed control. Even on these slow days, the market averages tack on a few points. SPX gained $7 to close at $1633 and RUT gained $3 to close at $970. Trading volume pumped up a bit with 2.4 billion shares of the S&P 500 stocks trading. This is right at the 50 dma. Trading increased 12% on the NYSE and rose 2% on NASDAQ.

This is a slow week for economic data. Tomorrow will bring the weekly unemployment claims data, but that isn't likely to change much and consequently isn't likely to slow down this market. The major averages appear to be slowing a bit, so maybe we will trade largely sideways for a bit to blow off steam in this rally. At least I hope so; the alternative may not be pretty.

My iron condor on RUT for May stands at a net gain of +$1,759 or +10% with position delta = -$20 and position theta = +$47. It looks like we may be closing the call spreads on Friday as we apply the Two Sigma Rule, unless we see a bit of a pull back before then. Currently, those 1010/1020 call spreads are about one and a half standard deviations OTM.

This has been an interesting bull market; I don't recall having a bullish run this strong with such a large chorus of naysayers predicting an imminent correction. Maybe the last few years have turned us into pessimists.

After Friday's strong rally, one might have naturally expected a little profit taking today, but no way. SPX tacks on another $3 to close at $1618 and RUT gained $5 to close at $960. That may not seem like a strong rise upward, but the consistency of the upward pressure is what impresses me. But this rally continues to be a low volume affair with only 2.2 billion shares of the S&P 500 trading today. Trading volume fell 15% on the NYSE and fell 13% on NASDAQ.

There weren't any economic data reports today and minimal economic news.

One data point from Friday that I found significant, but forgot to point out in Friday's blog: Germany's equivalent of our Dow Jone Industrial Average, the DAX, jumped upward over 1% on the U.S. nonfarm payrolls report. This underscores a basic tenet driving this stock market - it is the best game in town. We may not see our economy as firing on all cylinders, but it beats the alternatives, so global monies are flowing into our stock market. When combined with fed stimulus, it is a powerful combination.

My May condor is feeling a little of the upward pressure. The P/L now stands at +$1,052 or +6%, with delta = -$4 and theta = +$275. But the 1010 calls still have a delta of 2, so those spreads are still pretty safe. We may still see a pull back or breather of some sort, but the probability of a severe correction is diminished, in my opinion. There are just too many forces pushing this market higher. But remain on guard. Risk management is king.