Markets sold off broadly today with all of the major indexes posting losses.  SPX dropped $14 to close at $1286 and RUT closed at $795, off $13. Trading volume was flat to declining with 2.9 billion shares of the S&P 500 trading while volume was down 1% on the NYSE and down 3% on NASDAQ. Today held no significant economic news to drive the markets lower. It seems the bearish sentiment is taking hold. The sovereign debt issue in Europe continues to grab headlines and worry traders; this is also driving the dollar higher, and generally, a stronger dollar hurts US equity markets. Today's close on SPX surpassed the lows set in late February and mid-April. Now we are nearing the March low at $1257. This chart is looking more and more like a new bearish down trend rather than a correction in an ongoing bull trend. However, SPX is down about 6% from the May high, so that is still within the historical range of market corrections.

My July iron condor on RUT at 700/710 and 880/890 stands at a P/L of +$840 with a position delta = +$4 and theta = +$101. I set up the July condor somewhat tighter on the call spread side and allowed more safety margin on the put spread side, and that has worked out very nicely. Our position is now perfectly delta neutral with a healthy theta/delta ratio and put spreads that remain about 1.5 standard deviations OTM, even after the severe decline of the past few days. I don't think it is unreasonable to use your judgment of the market trend when establishing the condor position, but never use your judgment to override your adjustment criteria. That can get you in real trouble.