Markets continued to trade higher today, but the low trading volumes that have characterized this market throughout 2014 continue. SPX, RUT and the NASDAQ composite all gapped open higher this morning. NASDAQ set a new all-time high both yesterday and again today. SPX traded upward $10 to close at $1982 and RUT closed at $1162 for a gain of $4. RUT is now above its 50 dma, but remains well below its early July high. However, SPX is within striking distance of its July closing high of $1988. Trading in the S&P 500 stocks dropped slightly to 1.6 billion shares. Trading volume on the NYSE declined 1%, as did trading volume on NASDAQ. The 50 dma on SPX trading volume has dropped from 2.4 billion shares to 1.6 billion in the last four months.

Volatility dropped slightly with the VIX closing at 12.2%, down about one tenth of a point.

The Consumer Price Index (CPI) increased 0.1% in July, down from last month's 0.3% increase. Housing starts for July were up with an annualized rate of 1093k, up from June's 945k. Building permits increased to 1052k from last month's 973k. Traders will be studying the FOMC minutes that will be released tomorrow for clues of the timing of higher interest rates. But all signals from Yellen have been for low rates well into 2015. She will be speaking at Jackson Hole Friday and we may see the markets move a bit, depending on the interpretation of her speech.

My Sept iron condor on SPX at 1830/1840 and 2040/2050 stands at a net P/L of +$2,540 on 20 contracts or +16%. The trade remains largely delta neutral (-$41 on 20 contracts) even with the recent moves higher. I chose to use SPX because RUT has been much more volatile this year.

This most recent correction is following a similar pattern to those of the past 18 to 24 months - down in a relatively short period of time, but then fully recovering those losses in an equally short period of time.