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Let's recap: SPX drops $30 on Thursday; SPX gains $42 on Friday and then drops $15 today. If we were at the carnival, we might be feeling a bit nauseous. SPX closed at $2077, down $15 and RUT traded down even stronger, closing at $1164, down $19. As one would expect, volatility rose a bit with the VIX closing up a point at 15.8%. Trading volume in the S&P 500 companies was down at 2.5 billion shares, down from Friday, but still above the 50 dma. Trading declined 7% on the NYSE, but increased 2% on NASDAQ.

We didn't have any significant economic data released today.

RUT has been trading more bearishly than the SPX for the past several months. It corrected more strongly in August and broke that support level in late September, whereas SPX did not reach the support level created by the August flash crash. SPX bounced back strongly in October and appeared to threaten the previous all-time highs from the summer months, but RUT remained well off of the previous highs. That trend continued today with RUT dropping 1.6% while SPX only declined 0.6%. RUT found support at its 50 dma today but SPX remains more than $30 above its 50 dma. The small cap stocks, typical of the Russell 2000 Index, tend to lead the markets higher in bull markets and lower in bear markets. RUT's recent bearishness may be a warning sign.

The wrestling match with my December iron condor on RUT is nearing its end this week (assuming we close Friday in advance of expiration week). After four different adjustments, the position stands roughly at break-even today, and looks likely to be closed for a small gain on the order of 2-3% this week. The January position on SPX at 1850/1860 and 2210/2220 stands at a net gain of 9%. The Flying With The Condorâ„¢ service will end the year with a track record of something on the order of +43-45%.

Unfortunately, this price volatility is likely to continue until the FOMC meeting and announcement next week, and perhaps for some time after that announcement as the market sorts out the effects of an interest rate hike (assuming that is in the works). Analysts have been steadily downgrading earnings estimates for the S&P 500 companies for the fourth quarter, down 3.4% in the first two months of the quarter. This is one more headwind for the market as we move forward. A resumption of the strong bullishness of 2013-2014 appears less and less likely.