Today turned out to be a positive day in the markets, but this morning illustrated the extreme precariousness of this market. The market opened up positively and traded upward, and then lost about $12 in about 5 minutes or less. As it turned out, the panic was based on a report of a committee vote in Austria dealing with procedural agenda arrangements for the eventual vote of their Parliament on the European bailout package. Within a few minutes, the markets recovered and traded upward steadily until the last 30 minutes of the day, when they sold off. SPX ran as high as $1202 before closing at $1189, up $16 for the day. RUT gained $12 to close at $704. Markets were encouraged by reports that the leaders of Germany and France assured Greece they would have emergency loans available to prevent default until the European Union bailout package became available.

Retail sales came in flat for August as did the PPI. A flat PPI was reassuring since many analysts have been concerned about inflation heating up. But flat retail sales were a concern.

Trading volume in the S&P 500 rose to the 50 dma at 3.6 billion shares; trading on the NYSE dropped 2% while volume rose on NASDAQ by 19%.

Today's trading reinforced two conclusions about this market: 1) It is an extremely volatile market - and those words don't do it justice. It can turn and run you over while you go to get a snack. 2) We are trapped in a trading range of about $1120 to $1220 (you might define the range a bit differently if you use the intraday highs and lows). Be cautious.

My September condors are well positioned to have all of the current remaining spreads expire worthless. All of the spreads are over two standard deviations OTM. My Oct condor stands at a P/L of -$3,000 with delta =-$70 and theta = +$120. The call spreads at 770/780 are under pressure. We'll see what tomorrow brings.