Most traders were expecting good economic news this morning with lower unemployment claims and robust retail sales for December. But that wasn't the case. Unemployment claims rose to 399k, up from last week's 375k and retail sales for December rose a tepid 0.1%. Thus, markets traded down and hit lows mid-morning. However, the bulls then started buying and drove the markets slowly higher the balance of the day. SPX closed at $1296, up $3 and RUT also rose $3 to close at $770. Trading volume was flat from yesterday with 2.8 billion shares of the S&P 500 trading. Trading volume was up 2% on the NYSE and down 3% on NASDAQ.

The bullish news is that SPX has now closed above support at $1285 for three trading sessions. Support was tested yesterday and today, but it held in both cases; note the long tails on yesterday and today's candlesticks. By contrast, RUT only today has finally reached the late October highs around $770. So the same story continues to play out in the markets: there is sufficient moderate to good economic news here in the states to support the markets, but the specter of European sovereign debt holds the markets back. If you follow the seasonal trends of the stock market, you know that we are entering a traditionally weak part of the year following the Santa Claus rally. But this year may be different. The market seems to do its best to surprise us just when we think we have it figured out.

My Feb RUT iron condor at 590/600 and 840/850 stands at a P/L of +$1,700 with position delta = -$50 and position theta = +$79. The 840/850 call spreads are just outside of one standard deviation OTM. The 670/680 put spreads are all that remain of my Jan RUT iron condor position.