All eyes were focused on Bernanke this morning, but nothing really new was revealed in his speech. The FOMC appears to be prepared for another round of quantitative easing, but many qualifiers are still sprinkled through the language. The markets appeared to be buoyed by this at the open as the SPX spurted to $1181, but then it pulled back and traded sideways through most of the day, closing up $2 at $1176. For those of you trading the SPX, it settled at $1183.67, reflecting that strong push early this morning. Homework question for you: how can the SPX settlement price come in higher than the high for the day? RUT behaved similarly, but closed down $2 at $703. RUT's settlement price was just posted a few minutes ago: $712.93. That represents an unusual divergence from Thursday's close to the settlement price for RUT; it has averaged only $4.42 all year (this was over $8).

One unusual note to today's market action: generally the major indexes traded sideways and closed largely unchanged for the day. However, trading volume was generally up and hit record highs of 5.2 billion shares in the S&P 500 stocks; these stocks have not traded at that level since July 1. Trading on the NYSE was up 27% and was up 10% on the NASDAQ.

Economic news was minimal and didn't seem to have much effect on the markets today. The NY Fed Manufacturing Survey came in at 15.7 for Oct, increased from September's value of 4.1. The University of Michigan Consumer Sentiment Survey reported 67.9 for October, down slightly from the previous month's 68.2. CPI rose a mere 0.1% for September.

My Oct iron condor clobbered me for a 60% loss. As I looked back over this position's history, two areas bled red ink. One was the cost of my hedge options, or my insurance. But my post audit revealed that I followed my rules for starting and ending those hedges; the RUT just conspired to trade up and down through my adjustment trigger value, resulting in many hedges and many small losses, accumulating to a large loss. So this was simply one of those "costs of doing business" in trading. However, the other area of red ink was entirely my mistake. After rolling my call spreads up out of danger in late September, I realized the position was a modest loser at best. I should have left it at that and taken the loss. Instead I rolled my calls down and the puts up in an attempt to salvage a gain from the month. The market's euphoria over QE II then proceeded to roll over my call spreads; that was bad timing for my position, but I should not have been there in the first place. Always evaluate your trading after the fact and learn from your mistakes. But don't beat yourself up too badly.

The Nov RUT iron condor is well positioned at a P/L of -$2,746, position delta of -$30 and position theta of +$85. The theta/delta ratio is excellent. We are hedged with Dec $740 calls. If RUT trades higher, we will roll the calls up, but leave the Dec calls in place to continue their gains. If RUT pulls back, we will sell the Dec calls.

Congratulations to those of you who played the GOOG straddle. I have the Nov 510/520 call spreads - merely a 40% trade rather then the 125% that was possible from the straddle.

Enjoy your weekend.