The markets opened up in the red this morning based on news of China's interest rate hike and continued concerns over the unrest in Egypt. China's interest rate hike renewed debate over the Fed's monetary policy, with some analysts arguing that quantitative easing should be discontinued. But as the trading day worn on, traders apparently became more comfortable and traded the broad indexes higher with the strongest gains occurring in the last hour of trading. SPX closed at $1325, up $6 and RUT gained $5 to close at $814. RUT set a new 52 week high with today's close. In fact, RUT has not been at these levels since late 2007. However, trading volume was down again today with 3.0 billion shares of the S&P 500 stocks changing hands, down from yesterday and well below the 50 dma at 3.5B. Trading on the NYSE was flat with no change from yesterday and volume was up 3% on NASDAQ. Setting new highs on lower volume isn't a healthy sign of a bull market, so be cautious. I am not suggesting sitting on the sidelines; on the contrary, "make hay while the sun shines". But be ready to bail out and protect your gains.

My March iron condor on RUT at 690/700 and 875/885 stands at a P/L of +$340 with delta = -$40 and theta = +$82. The theta/delta ratio is good at about 2:1 but this ratio will deteriorate if this bull run continues higher. With 37 days to go, we have plenty of time to get in trouble, so the trade must be managed carefully.