When Thomas Paine said, "These are the times that try men's souls", he wasn't thinking about markets, but that is certainly an appropriate quote for delta neutral traders over the past 18 months. Only two days ago, the markets took off with a roar and ran over everything in their way. Today they gave back much of those gains. Google's earnings announcement unnerved some investors with concern over future investments and Eric Schmidt's absence on the conference call. Based on that alone, I expected some softness this morning. But then the SEC charged Goldman Sachs with fraud and the market collapsed; everyone was running to lock in the profits from this incredible run-up of the past 45 days. RUT dropped nearly $10 to close at $715 while the SPX closed at $1192, down nearly $20. Trading volume is always higher than average on expiration Friday but today's trading was off the charts. The S&P 500 traded over seven billion shares today!

Ironically, I adjusted my May condor on RUT yesterday by rolling half of my 750/760 calls to 770/780 and closing all of my 590/600 puts and rolling them to 650/660. I left my June $750 calls in place as a hedge against a continued move upward. Imagine my surprise today. But it is better to have adjusted early than too late. The position greeks are solid with delta = +$13 and theta = +$82. The risk/reward chart suggests the P/L for this position will be essentially unchanged up to around $730 on RUT, so it is well hedged for a continued move upward. But do I need a hedge for the upside? The RUT hit a low of $710 today and then traders came to the table and bid it back up, so I think the basic bullish case for the market is intact. Bulls are still buying the pullbacks.