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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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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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Concerns over the European debt crisis have returned to the financial headlines and are once again worrying traders. SPX lost $12 to close at $1367 and RUT closed at $792, down $12. But trading volume dropped off to 2.8 billion shares of the S&P 500. Trading on the NYSE dropped 20% and volume dropped 7% on NASDAQ. SPX is holding the support line around $1360 that was established April 10-11. SPX dropped as low as $1359 this morning, but slowly recovered from there all day. RUT behaved similarly, dropping to $785 this morning (the low of April 10 and March 6) before rebounding a bit to close at $792. The absence of any economic data didn't help push the market either way.
VIX popped up over 20% this morning, but calmed as the day wore on to close at 19%. The fact that SPX has repeatedly held the support at $1360 is reassuring. If that support level fails, watch for $1340; if $1340 breaks, then a full blown correction is underway and it could get ugly. Another reassuring data point today was the drop off in trading volume as the major indexes dropped significantly. A big down day on increasing volume would be a bad sign.
My May iron condor on RUT stands at a P/L of -$180 with position delta = +$53 and theta = +$72. The put spreads are still over one standard deviation OTM, so this position is in reasonable shape at this point with 24 days to go.
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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.
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Markets opened higher this morning, but started sliding down hill in the afternoon to finish the day close to unchanged. SPX gained $2 to close at $1379. RUT fared better, gaining $5 to close at $804. Trading volume was actually down a bit from yesterday with 3.1 billion shares of the S&P 500 trading. Trading volume was up 17% on the NYSE, but was down 4% on NASDAQ. Today was a slow day for economic news, but I would have expected options expiration to boost trading volume more than it did.
RUT appears to be trading sideways from $785 to $815. Similarly, SPX can't break out above $1390 and appears to have support at $1360.
RUT settled at $812.66, so the April iron condor position at 700/710 and 910/920 will expire worthless for a 16% gain. The May position stands at a P/L of +$220 with delta = +$40 and theta = +$60. Year to date, the S&P 500 is up 9.6%, so the overall market is doing much better than last year. But Flying With The Condor™ is up 22.2% year to date.
Enjoy your weekend.
