The markets opened downward this morning and chopped sideways until around noon when a steady climb upward began. SPX closed up $9 at $1304 while RUT closed at $803, up $3 for the session. Trading volume dropped off markedly with 3 billion shares of the S&P 500 trading, down from yesterday and well below the 50 day moving average. Trading on the NYSE was down 18% and trading volume dropped 22% on NASDAQ. Early news of a major earthquake in Japan worried traders but as news came in from Saudi Arabia of "business as usual" and no protesters rioting in the streets, the market began to slowly climb. Markets ended yesterday at a solid support level and this session's bounce upward was encouraging. However, it came with lower volume. A strong upward move on increasing volume would be more encouraging. Volatility dropped off with an 8% decline in the VIX. This is a positive sign, suggesting institutional investors were not buying protection in volume. Oil prices also softened a bit and this helped the equity markets stabilize.

Someone asked me about the DOW the other day and it made me realize how little I follow that index. The SPX is a much better gauge of the overall market with 500 mid-cap and large-cap stocks as compared to the 30 Dow blue chip stocks. When I look at the SPX chart, I can't take too much confidence based on today's price action. It certainly isn't bad (I was expecting worse today, especially in light of the earthquake). But today's modest rise just barely gets us back into the trading range of the past few weeks. And the light trading volume isn't reassuring either.

The drop in volatility helped my RUT condors, but IV on RUT is still relatively high at 28%. The Mar position at 730/740 and 875/885 stands at a P/L of +$3,620 and a position delta = +$18 and position theta = +$198. The put spreads are 2.2 standard deviations OTM and the call spreads are 2.5 standard deviations OTM, so I decided to leave both sides of the position open over the weekend. If either spread gets close to two standard deviations OTM, I will close it next week. Reaching the Friday before expiration week with both spreads of the condor over two standard deviations OTM is very rare, especially over the past two years. The April iron condor on RUT stands at a P/L of -$100 with a position delta = +$8 and position theta = +$97. The theta/delta ratio is very strong and each spread is about 1.3 standard deviations OTM with 35 days to go to expiration.

BTW, NFLX hates me. I sold the 190/200 put spread on Monday, threw in the towel on Wednesday as it traded down into the mid-190s, and today it closed just under $205. I will let you know when I trade NFLX again so you can go the other way.

Enjoy the weekend.