That pull back was certainly short lived. The SPX closed up $12 at $1178; that was almost the mirror image of yesterday's market when it opened at $1179 and fell to $1166. Today's open was $1167. It would appear the bulls are back in charge and the QE II train is still running. The dollar lost ground today and that certainly helped stocks somewhat; and another batch of largely positive earnings reports was helpful as well. RUT behaved similarly, closing up $8 at $702 (yesterday's open was at $702). The Fed's Beige Book was almost the only significant economic news and the market just yawned. Trading volume was down from yesterday's highs but still at pretty high levels. 4.3 billion shares of the S&P 500 stocks traded; that is down from yesterday but still above the 50 dma. Trading volume declined 13% on the NYSE and dropped 9% on NASDAQ.

This market reversal caught my Nov condor without its hedge (closed yesterday). As Yogi would say, "it's like deja vu all over again." It seemed we were always getting whipsawed with our hedges in our October condor. I reapplied the Dec call hedges and reduced the position delta to a manageable -$35 and yet theta remains high at +$111.

So we wait to see if the euphoria over positive earnings and the prospect of further quantitative easing will continue to fuel this market. That doesn't seem reasonable to me, but we play what the market gives us, not what we believe should be happening.