Continued unrest in the Middle East and Libya drove up the price of oil and that, in turn, generated selling pressure on equities. Traders are concerned about the impacts of $100 oil on the tentative economic recovery both in the US and globally. The SPX opened in positive territory but almost immediately started selling off and steadily declined all day. SPX lost $21 to close at $1306 while RUT closed at $807, down $16. Trading volume was up, with 3.7 billion shares of the S&P 500 stocks trading. Volume was also up 6% on the NYSE and up 10% on NASDAQ. If you are looking for some positive news amid today's bloodshed, it might be the fact that today's spike upward in volume was less than the first three trading sessions of last week or on "Egyptian Friday" (January 28). But I may be guilty of whistling in the dark.

Volatility (VIX) spiked back up and erased the declines of the past two days. The ISM manufacturing index came in at 61.4 for February, up from the previous month's 60.8; this is the highest level since 2004. Construction spending was down 0.7% in January, which isn't as bad as many analysts expected, given the bad weather across much of the country in January.

My March iron condor on RUT stands at a P/L of +$2,500, delta = +$26 and theta = +$140. Both spreads are over 1.5 standard deviations OTM. So this position appears to be well positioned, in spite of the current market softness. For this position we will continue to trade what the market gives us; for our directional positions, we will anxiously watch the Middle East.