The markets rallied strongly today, and one might be tempted to think all is well. SPX tacked on $19 to close at $1388. RUT ran up $12 to close at $809. SPX is now trying to break through resistance at $1390. If SPX closes above $1390, that will return SPX to the sideways trading channel and traders can breathe a sigh of relief. But a close above $1420 will be required to resume the bullish trend, so it is far too early to celebrate.VIX dropped almost 3 points today to close at 17.2%, so that is somewhat reassuring. Trading volume was down again today with 2.4 billion shares of the S&P 500 trading. Trading volume on the NYSE dropped 3% and volume dropped 4% on NASDAQ. So we have a strong rally on weaker volume - not very bullish.

Initial unemployment claims rose to 380k this week, but continuing claims fell to 3.25 million, so we had another "not good, not bad" economic report. The PPI did not rise at all in March, so inflation continues to hide somewhere. With all of the money being printed the last couple of years, this lack of inflation is surprising.

My April iron condor on RUT stands at a gain of $2,780 with delta = +$1 and theta = -$3. The spreads are so far OTM that this position stands effectively at its maximum profit, so theta is essentially zero. The May condor stands at a P/L of -$440 with delta = +$34 and theta = +$65.

I was raised in Florida and had the experience of a hurricane tracking right through my home town. When the eye of the storm moved through town, I walked outside my house and was shocked - no rain; no wind; no sound; clear sky with stars twinkling. But one had to carefully enjoy the experience and get back inside, because the storm started up a few minutes later. In fact, some were killed because they didn't understand that phenomenon. I thought of that experience as I watched the markets today; we have now bounced back very strongly, but I think we should remain very vigilant. Don't presume talk of a correction is now passe. In my directional trading, I am generally leaning mildly bullish, but I am watching it very closely. In my non-directional trading, I just follow my rules and control the risk - in some ways a simpler approach, but many find it challenging to maintain the discipline.