The drop of 0.9% in nonfarm productivity levels surprised the market this morning and caused a sell-off on higher volume. RUT dropped back to its 200 dma before bouncing to close at $646, down $13 on the day. SPX fell through its 200 dma but recovered to close at $1121, down $7 on the day. The FOMC announcement appeared to buoy the market a bit, but it was short lived. As expected, interest rates were unchanged but some of the Fed's language concerning the economy was sobering, confirming signs of very slow economic recovery and not giving a lot of hope for anything to change soon. As has been typical lately, the trading volume bounced up on the sell-off, increasing to 3.5 billion shares of the S&P 500 stocks, up 29% on the NYSE, and up 26% on NASDAQ.

My Aug iron condor on RUT was helped by this sell-off, now standing at a delta of -$27 and theta = +$265, while the Sept condor has a delta of +$14 and theta = +$55. RUT appears to be building strong support at its 200 dma at $642 while the SPX appears to have strong support in the range of $1100 to $1115. This pattern together with the weak volume on advances, suggests the risk to our condors is to the upside, not the downside. But, the key is to play what the market gives us, not what we predict. For now, both of my condors are well positioned.