Several positive economic reports appeared to give the market a upward edge today, but the trading was choppy and mostly sideways. SPX closed up $5 at $1146 and RUT closed at $679, up $3. Trading volume was generally down from yesterday with 3.6 billion shares of the S&P 500 stocks trading today, but this is still above the 50 dma. Trading volume was down 8% on the NYSE and down 20% on NASDAQ. Personal income rose 0.5% and the final revision of the Michigan Consumer Sentiment report came in higher at 68.2 (66.6 last month). Construction spending for August was up 0.4%, a big improvement from July when it was down 1.4%.The ISM manufacturing index dropped from 56.3 to 54.4 for September.

SPX remains in a tight trading range from $1131 to $1150 and has been unable to hold a close outside that range. My Oct iron condor continues to improve its position with the passage of time; now it stands at -$2,723, delta = -$47 and theta = +$229. Both spreads are greater than one standard deviation OTM. The Nov condor has a P/L of -$1,360, delta = -$70 and theta = +$88.

My decision to roll my calls and puts in the Oct condor earlier this week bears some scrutiny. At this point, one might argue that this market is range bound and that a breakout downward may be more likely than a breakout upward. I was being conservative by closing and rolling the spreads; now that I have closed the November hedge calls, the best this position can do is a modest loss. But remaining in the previous position was exposing me to an upward breakout and a larger loss; the Nov hedges help contain the losses, but it isn't a perfect hedge. Trading the iron condor, like any trading strategy, is subject to your personal judgment. We may well make different decisions about when and how to hedge the position. The key is to be sure you are using a consistent system of risk management.