SPX opened this morning just above the 200 dma, but that was short-lived. As the day wore on, the selling intensified. Traders appear to be spooked by the prospects of a debt rating downgrade and the old news of a weak economy and continued high unemployment. All of the major market indexes logged large losses. SPX closed at $1254 for a loss of $33. And RUT lost $26 to close at $767. SPX is now in the area of $1250 to $1260 where the downturns in March and June both landed before turning upward. Trading volume was again up significantly with four billion shares of the S&P 500 trading. Trading was up 13% on the NYSE and was also up 7% on NASDAQ.

The one anomaly on the day was VIX. VIX opened at 24.2% and closed at 24.8% - unusual for a day where the major indexes lost so much value. This suggests that large institutions aren't aggressively buying protection in this market and that seems surprising.

My Aug and Sept iron condors on RUT have only their put spreads in play now; both call spreads have been closed. The put spreads are at 670/680. Earlier today I would have considered those to be in a safe position, but today's market drop has me wondering. It is interesting that the debt limit deal that everyone seemed convinced a week ago was so crucial now appears to be irrelevant. Tomorrow should be interesting. If the broad market indexes continue downward tomorrow, we will have broken the lows set in the last two corrections. Then we will have to seriously consider the prospect that the bull market has ended and a new bear market trend has begun.