At the open this morning, it appeared like the markets were going to continue yesterday's bullish run, but the sellers stepped in and pressured the major indexes until early afternoon, when buying pressure began to erase most of the early losses. By the end of trading this afternoon, the SPX had almost made it back to the starting gate with a close down $2 at $1270. RUT recovered somewhat but didn't fare as well, closing at $786, down $13. Volatility peaked this morning and then gradually declined all afternoon to close at 17.4%, just above its open. Trading volume increased modestly over yesterday's high levels. 3.7 billion shares of the S&P 500 stocks changed hands; volume increased 7% on the NYSE and increased 5% on NASDAQ.  The FOMC minutes from the last meeting were released this afternoon but had little effect on trading; it was the same news as from previous meetings: the economy is recovering but painfully slowly.

My Jan 1210/1220 and 1300/1310 condor on SPX remains underwater due to the pressure on the call spread side; delta of the 1300 calls remains high at 19, so I left the hedge options in place. Position delta = -$6 and theta = +$213. The Feb condor on RUT positioned at 680/690 and 860/870 is standing nearly at break-even with delta = -$23 and theta = +$90. The deltas of the short options are around 9 to 11.

Traders will be watching the ADP payroll report tomorrow for clues about Friday's jobs report. Today's profit taking may reflect some caution going into that jobs report. The first week in January tends to be volatile as traders seek the market's trend for the new year.