The bulls took charge today and drove markets significantly higher. SPX opened up and steadily tacked on gains as the day wore on; this is unusual; it has been a winning strategy for the past several weeks to simply watch the open and then place your bets for the opposite direction intraday. SPX gained $14 to close at $1308 and RUT also gained $14 to close at $779. This is the first time RUT has closed above the highs set in late October. Trading volume increased a bit but still remains rather anemic for a strong bull market. 3.2 billion shares of the S&P 500 traded today, just above the 50 dma at 2.9B; trading volume on the NYSE was only up 1%, but trading on NASDAQ was up 12%.

If you ascribe to the seasonal patterns in the markets, a strong showing in the first two weeks of January often forecasts a positive year for the markets. But that pattern also includes a weak patch of trading in late January into February before the bullish trend takes over for the year. I am still skeptical that the European debt crisis can be ignored, but we seem to be doing just that for the past couple of weeks.

The PPI dropped 0.1% in December, so no signs of inflation yet; industrial production increased 0.4% - not huge but positive. Capacity utilization increased a bit to 78.1% in December; those levels haven't been seen since 2008. This dose of economic data was certainly positive, but not as strong as the market's rise today (at least in my opinion). The VIX opened up higher this morning at 23.2% but moved down throughout the day to close at 20.9%.

My Feb RUT iron condor was pushed back a bit by this strong run upward; the P/L stands at +$1,740 with delta = -$58 and theta = +$95. The Feb 840 calls are still under nine delta. The Jan RUT 670/680 put spreads are almost $100 OTM at this point. Unless something dramatic happens tomorrow, I will allow them to enter expiration and expire worthless.