Before the market opened, the futures were positive, suggesting a strong open for the markets, but it was short-lived. The September Consumer Confidence Index didn't help, coming in at a seven month low. Traders were encouraged by some comments from some of the European banks, suggesting some help for the European sovereign debt problems. This caused the Euro to rally against the dollar, which hit several month lows today. The Case Schiller Home Price Index came in essentially flat for July. RUT and SPX tested their support levels this morning; SPX traded as low as $1132 (support at $1131) and RUT traded down to $659 before rebounding. By noon the markets had fought their way back to the unchanged mark, but a strong rally in the last hour resulted in gains for all of the market indexes. SPX closed up $6 at $1148 and RUT closed at $675, for a $7 gain. Trading volume increased over yesterday with a 19% increase on the NYSE and a 13% increase on NASDAQ. The S&P 500 stocks traded 3.3 billion shares, just below the 50 dma at 3.4 billion shares.The SPX is still trapped in the trading range between $1131 and $1150; a break out through either of those figures will merit your attention.

My Oct iron condor on RUT stands at a P/L of -$2,573, delta = -$112 and theta = +$110. The theta/delta ratio is essentially at one to one, suggesting we are at the edge of making some serious adjustments. The delta of the Oct $690 calls is 35 and the 540/550 put spreads can be closed for less than $0.20. If RUT drops back into its trading range tomorrow, I will leave the position as is. The Nov $690 calls are buying us time for RUT to pull back or trade sideways. The Nov RUT 520/530 and 740/750 iron condor stands at a P/L of -$1,140 with delta = -$63 and theta = +$81.

So we continue to watch a market that cannot quite decide which direction it wishes to take. These are interesting times for traders.