The markets opened down this morning but quickly recovered and traded largely sideways to close essentially unchanged for the day. SPX closed unchanged at $1186 while RUT closed down $1 at $707. The action yesterday and today on SPX is interesting. Yesterday, the bulls tried to take SPX to new highs but were pulled back to $1186, while the bears attempted to pull the SPX down at the open today but the bulls pulled the index back up to close at $1186. Unless something significant occurs in the ongoing earnings report action, I expect the market to trade without serious direction until after the election and the FOMC report next week. The VIX jumped at the open to 20.5% on the downward market move, but didn't return as the markets recovered; it closed at 20.2%, suggesting some hedging by the large portfolio managers. Trading volume was flat to mixed with a 3% drop on the NYSE and a 10% increase on NASDAQ. Trading in the S&P 500 stocks was flat at 3.5 billion shares, right at the 50 dma.

The Case Schiller housing price index increased 1.7% in August, down from the 3.2% increase in July, but it is moving in the right direction. Consumer confidence rose to 50.2 in Oct from 48.6 last month, and the FHFA Home Price Index rose 0.4% in August. We are seeing several data points suggesting a modest recovery for real estate, or at least no further deterioration.

My condor positions are largely unchanged. The Nov condor remains hedged with Dec calls since the Nov $740 calls are still at a delta of 23; the position Greeks are good with delta = -$54 and theta = +$127. The Dec condor has a delta of -$22 and theta = +$77. Rolling up the put spreads is a temptation in both of these positions, but we may need that extra safety margin on the downside. My fear is that the Fed will disappoint the market next week, and that could get ugly. For now, I see more risk to the downside than the upside for my condors. But I am not supposed to be making predictions, am I?