The new Japanese earthquakes sent some fear through the markets today. Although the markets opened reasonably positively, they never recovered from this news. SPX closed down $2 at $1336 and RUT closed at $849, down $5. Trading volume was flat to down with 3.1 billion shares of the S&P 500 trading. The NYSE saw trading volume increase slightly by 2% but volume dropped on NASDAQ by 11%. Initial unemployment claims were essentially flat once again at 382k, down 10k. Continuing unemployment claims came in at 3.7 million, down nine thousand.

One has to be impressed by the resilience of this market; the bears seem unable to get anything going to the downside regardless of the news or economic data. But similarly, the bulls are having difficulty hitting new highs and firmly resuming the bullish uptrend. The only exception has been the Russell 2000 Index (RUT); some analysts believe traders are seeking safety from global unrest in domestic mid-cap stocks and driving this index higher. RUT has set six new 52 week highs over the past seven sessions.

My May condor on RUT is essentially unchanged with a P/L at -$1,630 with position delta = +$6 and theta = +$54. If we were to close our call hedges today, we would have about $2,300 in potential gains remaining in this position. That is the power of this type of hedging adjustment; if the market slows or pulls back, we can salvage a large portion of our position's profits. But if the market doesn't pull back, we have minimized our losses. Delta neutral trading isn't feasible without these adjustment techniques.