The markets opened up strongly this morning and, unlike most days recently, stayed on that positive track all day, leading to positive gains across all of the major market indexes. SPX tacked on $39 to close at $1162. RUT closed at $683, up $32. Trading volume was up in the S&P 500 stocks, with four billion shares trading. Trading volume was up 2% on the NYSE and was up 10% on NASDAQ.

The only economic data out today was the report of new home sales for July; they came in at 298k, about even with the 300k in June. Many traders are anticipating something positive for the markets from Bernanke's speech at Jackson Hole on Friday, but that worries me a bit - what if Bernanke disappoints? This is an extremely nervous and volatile market.

My Sept iron condor on RUT is still hedged; I have learned the hard way not to remove my hedges too soon. What I lose on the hedge options is relatively small compared to the potential losses on the condor spreads if the market whipsaws. That position stands at a P/L of +$480 with position delta = -$16 and theta = +$39 on 20 contracts.

Today's market probably makes us all feel better, but this remains a very dangerous market. As always, it pays dividends to be strictly following your risk management rules.