The markets opened in negative territory and recovered somewhat, but weakened toward the end of the day and all of the major indexes closed with small losses for the session. SPX closed down $8 at $1337 and RUT lost $10 to close at $831. Trading volume dropped from Friday with 2.4 billion shares of the S&P 500 trading today. Trading volume rose 4% on the NYSE and dropped 3% on NASDAQ.

There wasn't any new economic data today, so all of the CNBC talking heads were focused on the debt ceiling negotiations. As they breathlessly talked about the end of the world as we know it, if we don't have a deal by August 2, I couldn't help remember the old story of Chicken Little crying that the sky was falling. Anytime a guest suggested this was a bit overdone, the hosts would leap on him as though he was an irresponsible nut. However, all one has to do is look at the bond markets - they aren't concerned; why do you suppose that market would be calm if the end is so near? One factual tidbit to feed the debate: only 12% of federal revenue to used to service the debt. If it only took 12% of your pay check to pay your mortgage, do you think the bank would worry about you defaulting? So why all the talk about the U.S. defaulting on its debt? The answer is politics and the talking heads love to drum up suspense and hysteria.

In the meantime, my Aug condor on RUT stands at a P/L of +$1,322 with a position delta of -$55 and theta of +$119 on 20 contracts. The Sept condor stands at a P/L of -$800 with a position delta of -$61 and theta of +$82. Both of these positions have plenty of safety margin to the downside, so we are in good shape to navigate these volatile markets. Don't panic; stay calm and wait for the high probability trade.