SPX opened this morning and immediately tested the lows yesterday by hitting a low of $1121 before rebounding and then trading sideways all day. SPX closed at $1136 for a gain of $7. RUT gained $9 to close at $652. Thus far, it appears the bottom of this trading range on SPX from about $1120 to $1220 is holding. But the market is fragile. More bad news from Europe or Washington could send it lower. Trading volume was reasonably high, but dropped off from yesterday’s high levels. 4.1 billion shares of the S&P 500 traded today, still well above the 50 dma. Trading volume dropped 28% and trading on NASDAQ dropped 32%.

At this point, it is clear that we are in a trading range, and have been in this range for several weeks. Technical analysts tell us that the longer one is in a trading range, the stronger the eventual break-out. The news or data item that tips the markets one way or the other will likely be from the European debt crisis, Washington’s deadlock, or some clear economic data signaling the next recession. Soon, we will have earnings announcements to add to the excitement.

My Oct condor remains unchanged with the 500/510 put spreads on RUT. Hopefully, good news comes out of Europe this weekend. But try not to worry about that until Monday. Enjoy the weekend.