The markets roared back today and have almost erased the damage done earlier in the week, although not much damage was done - certainly not anything worthy of being called a correction. SPX gained $13 to close at $1366, knocking on the door of recent highs in the neighborhood of $1375. RUT also gained, closing up $10 at $806. It is worth noting that SPX has further strengthened that support level at $1340 with this recent downward move, so be sure to mark that on the chart. I noted in an earlier blog that it was troublesome that while SPX was making new highs, RUT was being left behind. And this latest move is another parallel - RUT has not quite moved back into the trading range of $810 - $832 that it was caught in while SPX was making new highs in February. To trade as strongly as SPX has this year, RUT would have had to trade upwards of $865, the highs set in 2011. I am not a market statistician, but bull markets are normally led by the mid-caps, not the large blue chips. That is why this lagging RUT index has grabbed my attention. But the basic bullish nature of this market can't be denied - the pattern this week was one more indicator. The bears had their opportunity but couldn't make it stick. On the other hand, I don't see a bullish run resuming without RUT participating. Perhaps the result is a trading range for a "cooling off" period.

Trading volume was basically flat today with 2.5 billion shares of the S&P 500 trading. Trading volume on the NYSE was down 1% and volume was down 2% on NASDAQ. The only economic news of significance was the initial unemployment claims report which rose to 362k from last week's 354k. Continuing claims remain at 3.4 million. What does that say about tomorrow's jobs report? Briefing.com is predicting an increase of 250k jobs, probably based in part on the favorable ADP report earlier this week. But this market can probably withstand some negative news; so even a flat number may not cause any damage. We will also hear the final count on the participation in the Greek bonds deal tomorrow, but I am unsure what reaction that news will create; it seems like one day the market cares about Greece and the next day, it doesn't.

My Mar RUT condor stands at a P/L of +$3,390 with delta = +$9 and theta = +$109. The Apr position is also sitting pretty well delta neutral at a P/L of +$880 with delta = +$24 and theta = +$52. Tomorrow I will apply the Two Sigma Rule to the Mar spreads and determine whether the spreads need to be closed in advance of expiration week.