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The markets started the week lower this morning and just drifted sideways most of the day on lower volume. SPX closed down $5 at $1398 and RUT closed at $817, down $9. RUT closed right at its 50 day moving average. SPX remains firmly in the trading range banded by $1390 and $1420. Trading volume dropped to 2.3 billion shares of the S&P 500. Trading on the NYSE was down less than one per cent and trading volume on NASDAQ was down 10%.
The Chicago PMI came out for April at 56.2, down significantly from last month's 62.2. That may have discouraged traders a bit, or at least curbed their enthusiasm. VIX jumped up almost a full percentage point to 17.2%, reminding us to be cautious.
My May iron condor on RUT stands at a P/L of +$960 with a position delta of +$19 and position theta of +$92. The June condor stands at a P/L of -$160 with delta = -$46 and theta = +$85.
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After yesterday's market closed, Standard and Poors downgraded Spain's sovereign debt by two grades. This took the S&P futures into negative territory, but by this morning's open, all was forgotten. SPX opened above that $1390 support level at $1400 and advanced $3 to close at $1403. RUT closed at $825, up $7. Trading volume dropped well below the 50 day moving average today with 2.5 billion shares of the S&P 500 stocks trading. Trading volume was down 10% on the NYSE, but was up 1% on NASDAQ.
First quarter GDP came in at 2.2%, down from the 3% growth that analysts expected. The University of Michigan Consumer Sentiment survey came in at 76.4 for April, up a bit from the previous reading at 75.7.
In view of the disappointing GDP numbers and the downgrade of Spain's debt, one might have expected a push lower by the bears today, but that wasn't the case. Today's market was one more data point for the continuation of the bullish trend. We may see a bit of the summer doldrums set in soon, but the bears do not seem to have the ability to drive this market down.
My iron condor on RUT for May stands at a P/L of +$1,280 with delta = +$15 and theta = +$46. The June condor at 690/700 and 880/890 stands at a P/L of -$900 with delta = -$67 and theta = +$89.
Have great weekend.
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The markets appeared to have all of their uncertainties erased by Apple's stellar earnings announcement - I know that doesn't make sense, but it is hard to explain this market's ups and downs. One day it appears bullish; the next day it appears the world is ending. Today was strongly bullish - what will tomorrow bring? SPX gained $19 to close at $1391 and RUT closed at $812, up $14. SPX is sitting right at resistance; tomorrow's opening will be interesting to watch. Cautiously bullish is still the best description for this market.
Trading volume popped up a bit today with 2.9 billion shares of the S&P 500 stocks trading; trading volume was up 7% on the NYSE and was up 2% on NASDAQ. The VIX dropped significantly today, closing at 16.8%. That's a good sign for the bulls.
My May iron condor on RUT stands at a P/L of +$620 with delta = +$25 and theta = +$87. With 22 days left to expiration, we are in pretty good shape.
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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.
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It seemed like everyone was focused on Apple and their upcoming earnings announcement all day today. AAPL lost another $11 today, which fed the rumors that the announcement had some bad news. But AAPL blew away the estimates once again. Congratulations to those of you who played AAPL bullishly; shame on you skeptics (we long time Mac users are enjoying this).
SPX traded up a bit today, but it was pretty choppy. SPX closed at $1372, up $5. RUT gained $6 to close at $798. Trading volume was flat on the S&P 500 stocks at 2.8 billion shares. Trading declined on the NYSE by 4% and dropped 5% on NASDAQ.
The VIX lost about one percentage point, closing at 18.1%, indicating some calming in the markets. I think traders will remain calm and cautiously bullish as long as $1360 holds on SPX.
The Case Schiller Housing Index dropped again in February, down 3.5%. Consumer confidence remained flat at 69.2 and new home sales dropped 25k in March to 328k.
My iron condor on RUT for May stands at a P/L of +$160 with position delta = +$45 and position theta = +$78.
