Markets opened weakly this morning and the selling intensified as the day wore on. SPX lost $21 to close at $1216 while RUT lost $11 to close at $719. Trading volume rose again today with 3.6 billion shares of the S&P 500 trading hands, right at the 50 dma. Trading was also up on the NYSE and NASDAQ, 9% and 14%, respectively. The VIX rose over 36% but pulled back to close at 34.5%. SPX traded down as low as $1209 before recovering to close at $1216, just below the $1218 close about a week ago. Will support hold?

Economic data wasn't bad, so I don't think that was the underlying cause; the European debt crisis is overshadowing everything. Unemployment claims were once again under 400k, at 388k; continuing claims dropped to 3.6 million. Housing starts were flat at 628k and building permits increased from 589k to 653k. But the Philadelphia Fed survey dropped to 3.6 from the already weak 8.7.

I am allowing the 790/800 call and 660/670 put spreads of my Nov iron condor on RUT to enter expiration and expire worthless. Both spreads are over three standard deviations OTM. This results in a gain of $1,460 on 20 contracts or 9% on capital at risk. The Dec RUT condor position stands at a P/L of +$860 with delta = -$12 and theta = +$90.

So now we wait to see if the gloomy mood continues tomorrow; the SPX is now down over 3% for 2011. Those predictions of $1450 for year end are looking pretty optimistic.