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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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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.
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The markets opened higher this morning and just marched even higher as the day progressed. Most of the major market averages closed near their highs for the day. SPX ran up $21 to close at $1391. RUT closed at $811 for a gain of $13. Trading volume fell off a bit with 2.5 billion shares of the S&P 500 trading. Trading volume fell 4% on the NYSE and dropped 3% on NASDAQ.
SPX closed above resistance at $1390, but just barely. We will have to see it hold that high tomorrow. The next level to watch is $1420, the recent high for the year. If we break through $1420, then this bull market is back on with strength. More likely would be a consolidating trading range between $1390 and $1420.
Housing starts dropped by 40k in March to 654k, but building permits increased 32k to 747k. Industrial production was flat in March and capacity utilization was also flat at 78.6%. This data isn't bad, but you wouldn't think it would prompt a rally as strong as what we saw today either. This market reminds me of the volatility we observed last fall, where the market would drop dramatically one day and then swing back just as far to the up side the next day. This kind of volatility can be somewhat unnerving. As some of the commercials assert, "This isn't your father's market".
My May iron condor on RUT stands at a P/L of -$400, with a position delta = +$28 and position theta = +$87. The April condor will be allowed to expire worthless this weekend.
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The SPX basically traded sideways today, but with considerable volatility, ranging from a low of $1383 to $1391 (SPX hit intraday lows three different times). SPX closed at $1385, down $6. RUT lost $7 to close at $803. Trading volume was basically flat with 2.6 billion shares of the S&P 500 stocks trading. Trading volume was up 3% on the NYSE and was up 4% on NASDAQ. $1390 on SPX remains the resistance level to watch; judging by the VIX at 18.6%, traders remain on guard. There wasn't much news on the economic front today which may have contributed to the market's lack of direction. The volatility of this market should give traders pause about holding any position through an earnings announcement; the latest evidence is QCOM.
My May RUT iron condor at 720/730 and 910/920 stands at a P/L of -$340 with delta = +$49 and theta = +$62. the April condor continues to cruise toward expiring worthless for the maximum gains. Next in the earnings announcement cross hairs is CMG. Can it maintain its glorious ascent?
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The markets opened higher this morning, but then quickly gave up that positive tone and traded sideways most of the day. SPX closed almost unchanged at $1370, up less than a dollar on the day. RUT gained $2 to close at $798. Last Tuesday and Wednesday appeared to set $1360 as a support level; $1340 is the support level well established in February and March. Breaking $1340 could be scary. On the other side, we will have to break through $1390 to feel a bit more confident about this market. That was a pretty well established support level before SPX broke down through it on April 9. For now, one would have to describe this market as trapped in a sideways trading range. Trading volume dropped off a bit today with 2.6 billion shares of the S&P 500 trading; trading volume on the NYSE was down 3% and trading on NASDAQ was up 7%.
Today's economic data were a bit anemic with retail sales increasing 0.8% in March and the Empire manufacturing survey coming in at 6.6, down markedly from the previous reading of 20.2.
My April iron condor on RUT is cruising down to expiration this week end. This position essentially stands at its maximum gain at this point at about 16%. The 910/920 call spreads are 5.8 standard deviations OTM and the 700/710 put spreads are 4.7 standard deviations OTM. Barring the end of the world, both spreads will expire worthless this weekend. The May iron condor on RUT stands at a P/L of -$900 with delta = +$52 and theta = +$68. The volatility of this market is a little disconcerting, but non-directional trades are doing rather well in this environment, as long as you know how to adjust them when this market gyrates.
