The markets opened up hesitantly this morning, but in positive territory after yesterday's strong rally. However, as the day wore on, the markets marched steadily higher. SPX closed at $1400, up $9 while RUT tacked on $6 to close at $818. But volume was down a bit with 2.7 billion shares of the S&P 500 trading. Trading volume was down 4% on the NYSE and up 3% on NASDAQ. SPX firmly broke through resistance at $1390 today and returned to the earlier trading channel of $1390 to $1420.  In similar fashion, RUT is now back in the $815 - $847 channel of late March.The low trading volume makes me a little skeptical that this rally can go on to break through $1420, but we'll see. One thing is for sure: with all of the negative news today about increasing unemployment claims, the bulls still took it higher - they have a firm hold on this market.

Volatility dropped a little more today, with the VIX closing at 16.2%. Unemployment claims came in at 388k, flat from last week, but trending upward over the past several weeks. Continuing unemployment claims stand at 3.3 million, up three thousand. Pending home sales were the positive surprise with a 4.1% increase in March.

My May iron condor on RUT at 720/730 and 910/920 stands at a gain of $1,260 with delta = +$14 and theta = +$43 with three weeks to go. It is very well positioned with each spread about two standard deviations OTM. Keep an eye on $1420 on SPX. If we break through that resistance level, 2012 may well turn out to be a very good year for stocks.