Markets appear to be hitting resistance and hesitating. Next week may show us the new direction: either a break-out to resume the bullish trend or continued weakness and possibly a serious correction. SPX lost $4 to close at $1836 while RUT gained $3 to close at $1165. SPX traded weakly sideways to slightly higher most of the day, but weakened around 2 pm ET. Then SPX fell out of bed during the last 30 minutes and closed at its lows for the day. Volatility remains relatively low at 14.7% on the VIX. Trading volume was unusually flat for options expiration with 2.3 billion shares of the S&P 500 stocks trading, only slightly above the 50 dma. Trading volume was unchanged on the NYSE and up 8% on NASDAQ.

RUT settled at $1167.71 and SPX settled at $1841.85. RUT settlement was not an issue for me this month since I had closed my Feb put spreads on January 24th as the market started its pull back and then closed my Feb call spreads on February 3rd as the market started bouncing back so strongly. The net result was a 7% gain in what I considered a tough month.

As I study the charts, it looks like we are hitting our heads on resistance. We may see the tipping point next week - a resumption of the bullish trend or perhaps a sideways consolidation pattern. Some analysts are still calling for an even more serious correction, but that seems less likely given this strong recovery from the lows on February 5th. We'll see.

Have a great weekend.