The jobs report this morning caused traders to pull back and reconsider their bullish stance. However, by the last half hour of trading, the bulls had reaffirmed their optimism and started buying in earnest. The SPX closed at $1225, up $3 on the day. By contrast, RUT traded in positive territory all afternoon, setting a new high for the year at $756, up $5. Trading volume was down with an 18% drop on the NYSE and an 11% drop on NASDAQ. Trading in the S&P 500 stocks dropped below its 50 dma. Economic data was mediocre to disappointing today, led by a disappointing jobs report. Small increases in payroll numbers were reported but much smaller than expected. In addition, the overall unemployment rate increased to 9.8%. Factory orders fell 0.9% and the ISM Services Index remained essentially flat at 55.0 (up from 54.3 in October).

While the futures dropped significantly after the jobs report was released this morning, the market slowly recovered throughout the afternoon. From my perspective, this looks like a bullish market that is not going to be easily dissuaded.

My RUT Dec iron condor stands at a P/L of +$1,980 with a position delta = -$67 and position theta = +$156. The 790/800 call spreads stand just outside of one standard deviation and we only have two weeks remaining, but RUT is making new highs every day. The Jan condor on SPX remains underwater with delta = -$76 and theta = +$80. The roughly one-to-one ratio of theta to delta warns us that this position is weakening and nearing the point of either adjustment or repositioning. December is historically a slow, largely sideways month as everyone starts to take off for the holidays. So this bullishness of the past few days may be tempered somewhat over the next couple of weeks. However, 2010 has been anything but typical so far.