Markets traded largely sideways today until the release of the FOMC minutes this afternoon. After traders saw no mention of QE III being in the works, the markets sold off. A mini-rally in the last few minutes of trading pushed markets close to where they started the day. SPX closed at $1341 for no change on the day and RUT dropped $3 to close at $792. Trading volume was flat with 2.5 billion shares of the S&P 500 trading; trading on the NYSE dropped 1% and trading on NASDAQ dropped 4%.

The VIX spiked up to 19.2% this afternoon as the market tanked, but recovered to close at 18%, essentially where it started the day.

SPX traded down and bounced off the 50 dma (just as it did yesterday), so this is looking like a pretty solid support level.

If you watch CNBC, you may be thinking the "end is near" because it seems like they have uncovered every bearish commentator they could find. But the chart doesn't suggest that. We have been largely trading in a broad sideways channel since mid-May. Now when we were looking at the chart on May 20, when it had steadily and steeply declined since May 1, that was scary. This market certainly isn't in a bullish trend, but it is far from a bearish trend as well. That is why I focus on the key support levels for the S&P 500. When these are broken, we know we are in for some tough times in the market. However, it is true that the current market is fragile. Some unexpected bombshell out of Europe could easily tip us over the edge, especially if we continue to see mediocre earnings reports such as Alcoa's.

My July iron condor on RUT at 610/620 and 850/860 stands at a net gain of $2,660 on 20 contracts with delta = -$11 and theta = +$44. The Aug position at 650/660 and 850/860 stands at a net gain of $320 with delta = -$60 and theta = +$92. We have the unemployment claims report tomorrow, but I doubt that report will be either good enough or bad enough to do much with this market.