The markets started the morning in positive territory but selling pressure quickly turned the tide. But the bulls reasserted themselves and recovered the losses before the market closed this afternoon. The earnings announcement season officially started last evening with Alcoa. Although Alcoa reported better than expected earnings, profit taking took the stock back a bit today. The earnings announcements and the sovereign debt problems in Europe are being watched closely by traders. The market appears to be teetering back and forth with neither the bulls nor the bears able to take control. SPX traded as low as $1270, but closed up $5 at $1274. RUT traded up $3 to $795. Trading volume pulled back a bit today with 3.2 billion shares of the S&P 500 changing hands. Trading volume declined 2% on the NYSE and increased 2% on NASDAQ.

My Jan SPX iron condor stands at -$1139, with delta = -$95 and theta = +$424. Theta is really starting to ramp up now that we are less than two weeks to expiration. The Feb condor on RUT stands at a gain of $780 with delta = -$48 and theta = +$97. The market is caught between the downward pressures of a slow economic recovery and sovereign debt concerns, and the upward pressures of the Fed's QE II and and a large amount of cash coming out of bonds into equities. So far, a clear direction has not revealed itself. Although I would argue that the bias is to the upside. In recent trading, every market dip has been met with buyers, as it was today. We'll see.