The markets continued their surge upward most of the day but around 2:30 ET, profit taking took over. It may also be significant that the S&P 500 was approaching the 52 week highs set in January. All of this took place with a large surge in trading volume. Volume was up 25% on the NYSE and 17% on the NASDAQ. Trading volume for the S&P 500, at 4.5 billion shares, broke strongly through the 50 day moving average at 3.8 billion shares. RUT closed up $3 at $670 while the SPX ran as high as $1145 before settling back to close up $2 at $1140. For those of you who study candlesticks, you will see a classic shooting star on the RUT and SPX charts. All of this adds up to a strong possibility that the market is pausing to catch its breath here, if not pulling back a little bit. Given the recent run upward, a little profit taking appears to be very reasonable.

My March condor continues to swim in red ink; RUT's correction followed by this meteoric rise is conspiring to deal me my worst loss in some time. Today's whipsaw didn't help. The run upward today forced me to close my 680/690 call spreads. But after watching the market's action detailed above, I sold those spreads again just before the market closed. Of course, this is a risky move that I wouldn't recommend (the classic "do as I say, not as I do"). But it may help reduce some of the losses.

My April condor is faring well. I have had to roll up both the calls and the puts, but I left the May 680 calls in place as a hedge against a continued move upward. This has left this position almost perfectly delta neutral with a moderate sized positive theta to continue to drive profitability. The April 700 calls have a delta of 23 so we still need the May call hedges.

Traders largely sat out today's trading session; volume was lower across the board. RUT and SPX both traded within a narrow range, $2 and $4, respectively. SPX closed at $1139, down twenty cents and RUT gained $0.05 to close at $667. The strong run of the markets over the past six sessions makes the market even more susceptible to any bad news. Even a minor pull back may spark a round of protective profit taking. However, there isn't much in the way of scheduled economic reports until Thursday's unemployment numbers, and then on Friday we have retail sales and the Michigan consumer sentiment report. So we may drift sideways for a couple of days.

I have rolled all of my call spreads up in both the March and April positions. I have also rolled the put spreads up from below to compensate for some of the losses rolling the call spreads upward. There is a trade-off in this maneuver: taking the profits on the put spreads helps offset some of the losses on the call spread side of the trade, but it also opens us up to a whipsaw if the market suddenly turns back. This is yet another example of the "no free lunch" principle.

Wow! The market took off to the races after hearing that the unemployment level was unchanged at 9.7% and 36k jobs were lost in February. I guess the market was expecting really bad news. When one looks at the intraday charts you have to be impressed with the steady rise throughout the day - a very strong showing. I expected to see some profit taking, but it never happened. Trading volume on the NYSE and NASDAQ were both up today, but the S&P 500 continues to trade below its 50 day moving average. The SPX ran up $16 to close at $1139, close to its 52 week high at $1150. But small caps have been even stronger than the blue chips during this bullish surge; RUT convincingly broke through resistance to close at a new 52 week high at $666, a run of nearly $14.

The market bulldozed right through my March and April iron condors. March is shaping up to be my first loss since August. My adjustments on April are holding it in check so far, but I may have to roll some of those call spreads up next week. In fact, this market swing has been even more severe than the one in late July that set up that earlier loss. However, it is naive to think trading doesn't involve losses. Many people are always searching for the guru who never loses. The reality is that many of those gurus don't even trade. Successful traders limit their losses in months like this one to manageable amounts. As long as you don't lose more than you gained last month, you can keep the doors of your business open. Risk management is the name of the game!

The markets traded in a narrow range today, held down by a stronger dollar and anticipation of tomorrow's unemployment numbers. Pending home sales dropped 7.6% in January, which surprised analysts who expected a 1% increase. Initial jobless claims dropped 29k from last week and continuing jobless claims also dropped 134k. This news appeared to push the market lower in the first hour of trading, but then it traded largely sideways until the final half hour. Then the markets moved up significantly to close with modest gains for the day; did someone leak the unemployment numbers? RUT closed at $652, up a little over $3 and the SPX closed above the significant $1120 level at $1123. Tomorrow will tell us whether these indexes have truly broken out from resistance. Trading volume was weak; it was flat on the NYSE, lower on NASDAQ and below average for the S&P 500. It appears the large players are still waiting for a signal to move.

Since my trading advisory service, Flying With The Condor™, began a few weeks ago, I will not be reporting daily on my condor trading. I will periodically update you on my positions and my track record. In the meantime, check out the Flying With The Condor™ service. It comes with a money back guarantee.

The Challenger jobs report cited 42k jobs lost in February before the market opened this morning. This was viewed positively since it was the lowest monthly job loss number since 2006. As the market opened, the ADP payroll data report cited a loss of 20k jobs in February, the smallest decline reported by ADP in a year. The markets traded upward on the basis of this good (?) news until about 11:30 am ET. Then the markets slid the rest of the day to close essentially unchanged. RUT closed up about $1 at $649 while the SPX traded as high as $1125 before declining to close at $1119, a gain of less than a dollar. The FOMC Beige Book was released this afternoon and reported modest economic improvement across the country. Trading volume was up today on the NYSE and the NASDAQ but remains below average on the S&P 500. Notice how the SPX traded higher both yesterday and today but could not hold those intraday highs. That behavior was also true of the trading in RUT today. This makes me wonder if this bullish run that began in early February is running out of gas.

In the meantime, my wounded March condor limps along with a net loss of $3,460, delta = -$138 and theta = +$206. I have just about run out of options to salvage this trade any further, although we will achieve our goal of limiting any one month's loss to less than a month's potential gain. This position's loss will be steadily decreased as the time decay accelerates these last few days; but our best case scenario is for a small loss. The Apr condor is faring somewhat better but is in a weakened position after this recent run up in RUT. The P/L is -$955 with delta = -$138 and theta = +$206. The big difference with the Apr position is that we have a lot of time and possible adjustments remaining to salvage a gain from this trade.

Investor's Business Daily changed its market reading to "market in confirmed uptrend" after yesterday's strong performance. Stocks traded up across the board today, although trading volume remains below average. Small cap stocks had led the recent gains, outpacing the large stocks typical of the S&P 500. RUT traded up almost $6 to close at $648 today, while the SPX rose a little less than $3 to close at $1118. The SPX appears to be struggling to break through $1120; it was above $1120 a couple of times today, but was pulled back. By contrast, the Russell 2000 index is only one dollar short of its 52 week high. The S&P 500 would have to rise over $30 to reach its 52 week high.

This March expiration month has been a very challenging month for delta neutral traders. This is one of those months when good traders are happy to break even or at least minimize their losses. I opened my Mar condor on January 21 with the RUT at $628; it proceeded to drop over $42 to $586 and has now roared back upward by $62 to its close today at $648. I rolled my Mar 660/670 calls up to 670/680. The trade now stands at a P/L of -$3,140, delta = -$28 and theta = +$153. This last adjustment moved our Greeks into a good position, but even if the market trades within the channel formed by this trade for the next couple of weeks, this trade will just barely break even.

The Apr condor stands at a P/L of -$805, delta = -$79 and theta = +$79 after adding a May call to adjust the position earlier today.

The markets chopped about a bit this morning after disappointing news from the ISM manufacturing index; the index declined for Feb and was lower than expected. But it didn't take long for the market to get over that disappointment and then it traded pretty steadily upward the balance of the session. Trading volume was mixed but generally lower: down about 8% on NYSE, up about 11% on NASDAQ, but it remained below the 50 day moving average on the S&P 500. RUT traded up over $14 to close at $643. The SPX closed at $1116, up a little over $11. The SPX close is right at resistance, whereas RUT clearly broke through resistance and is closing on its 52 week high at $649. Another remarkable aspect of today's strong market - this all happened as the dollar was trading higher.

Today's strength necessitated some adjustments to my Mar iron condors. I bought two Apr $660 calls for $8.50 to protect my call spreads. I also closed my 570/580 put spreads for $0.35 (a gain of $900) and rolled up to 590/600 for $0.60. So the Mar position now stands at a net loss of $2,080 and position delta = -$71 and theta = +$178. This trade is struggling to break even at this point; absent a pull back, we may be simply holding our losses to a minimum.

The April iron condor stands at a P/L of -$60, delta = -$93 and theta = +$89. The delta of the short $680 calls is up to 17, nearing the area for adjustment.

Now the big question: is this market going to push to new highs as RUT appears to be doing or drop back within the trading range as it appears the S&P 500 is doing?

The markets are shrugging off good news and are largely unaffected by bad news. GDP results for the fourth quarter were revised upward to an annual rate of 5.9%, but the markets apparently do not believe this is sustainable so that had little effect. Existing home sales were down 7% in January and the consumer sentiment survey from the University of Michigan was unchanged - so consumers are also trading sideways just like this market. Trading volume was down on all markets. The S&P 500 closed at $1104, a gain of less than $2 (still in its trading range) while the RUT was close to unchanged, closing at $629, down less than $2 (also still within its trading range).

The time decay on my March condors is building and slowly moving that position toward profitability. The P/L is up to -$840 (was at -$1540 yesterday) with delta = -$70 and theta = +$162. The newly coined April condor is already in the black with +$600, delta = -$37 and theta = +$75. Both positions have healthy theta/delta ratios. The market's indecision is good for delta neutral positions.

The markets opened weak this morning on the back of a stronger dollar and some poor news on the unemployment front. New unemployment claims rose  from 474k to 496k with the market expecting 460k. Ongoing unemployment claims rose to 4.62 million from 4.61 million with the market expecting a decline to 4.57 million. This sent all of the major indexes significantly lower. But the dollar weakened as the day wore on and the market recovered most of its losses. After plunging as low as $621, RUT closed unchanged at $630, right in the middle of its 625-635 trading range. Similarly, SPX traded down to $1086 before recovering to close at $1103, a loss of less than $2. SPX has strong support at $1100 and resistance at $1116. What strikes me about this market is its lack of direction; it seems trapped in this trading range without a strong bullish case, but also without a strong case for lower prices. The flurry of earnings reports during the past few weeks are similar when you think about it: companies generally have slashed costs to retain earnings but their revenues have actually decreased and their forecasts for growth have not been overly optimistic. Thus, one gets a picture that isn't very bullish when looking forward, but it isn't full of gloom and doom either. So a sideways market isn't too surprising.

My Mar condor stands at -$1,540 and delta = -$67 and theta = +$178 and the April condor stands near breakeven with delta = -$43 and theta = +$83.

The markets traded down this morning after reading Bernanke's prepared remarks for Congress, but then rebounded and held some of the gains into the close. SPX closed up over $10 at $1105 while the RUT closed at $630, up about $5. Both indexes are still trading within the narrow ranges of support and resistance we have discussed earlier, especially the well defined range for the S&P 500 from $1100 to $1116.

I decided to establish my April iron condor on RUT today. I sold twenty contracts of the 680/690 calls for $1.10 and twenty contracts of the 550/560 puts for $0.85. At the close, this position stands at a P/L of -$80, delta = -$43 and theta = +$78. Both short options are at a delta of 13. Our Mar RUT condor now stands at -$1,720, delta = -$68, and theta = +$161. The 660/670 calls are about one standard deviation OTM and the 570/580 puts are about one and a half standard deviations OTM. The weather is perfect for condors, just muddling along.