It appears that many traders began to take the Fed's assessment of the economy much more pessimistically after thinking about it overnight. The market sold off at the open and traded even lower as the day progressed. China's reports of weaker industrial production in July probably didn't help the situation. Talk of a double dip has once again taken the front row in traders' worries. RUT traded down $26 to close at $620 while the SPX closed down $32 at $1089, the 50 day moving average (dma). This move occurred on higher volume, with the S&P 500 stocks trading 4 billion shares, right at the 50 dma. Trading volume on the NYSE was up 15% and trading on the NASDAQ increased 11%.

In volatile markets like we have been experiencing, one's condor position can change overnight; yesterday, the Aug position appeared to be well positioned; today I bought one Aug $630 put for $17.45 to hedge this downside move; this brings the position to a P/L of -$1712, delta = +$31 and theta = +112. My Sept condor stands at P/L = +$980 with delta = +$58 and theta = +$19. The Aug position has now required six hedge adjustments plus four rolls of spreads up and down - what a volatile market! More importantly, we are still "in the game" with a shot at breaking even or perhaps even a small profit. Which way will the roller coaster run tomorrow?