Markets traded down today on increasing volume, but support levels aren't being broken; so one has to concede that control remains with the bulls, at least for now. SPX lost $5 to close at $1827, while RUT traded down $9 to $1147. Trading volume popped upward with 2.1 billion shares of the S&P 500 stocks trading today; the 50 dma = 2.0B. Volume increased 15% on the NYSE and increased 36% on NASDAQ. But one has to take these increases with a grain of salt, since we are coming off the low volumes of the holidays. Volatility declined slightly with the VIX closing down 0.2 points at 13.6%.

Economic data were mixed today with the ISM services index coming in at 53.0 for December, down from 53.9. But factory orders increased 1.8% in November, which was greatly improved over the half percent decline in October.

It is difficult to confidently say the bears have finally taken control of this market as long as support on SPX at $1810 continues to hold. But consider this: SPX broke out above resistance at $1810 (set back in late November and early December) on December 20. SPX then traded to a high of $1849 on 12/31. SPX has now given back $22 or 56% of that gain. We have a strong support level at $1810 that remains intact, but the bulls have given up a lot of previous gains at this point. It is enough to at least increase one's caution. Even more caution may be generated when you look at the RUT chart. RUT closed today at the late November high of $1147. RUT is already knocking at the door of its support level that is parallel to SPX's $1810. Small caps lead the bull market higher, but they also lead the bear market lower.

My Jan iron condor on RUT now stands at a net P/L of -$2,240 on 20 contracts or -13%, with position delta = -$29 and position theta = +$388.  This position is now almost perfectly delta neutral with two weeks to go; as one can see from the theta/delta ratio, time decay is now strongly favoring the position. The danger to this position would be a large sudden move in either direction. A little sideways meandering would be ideal.