The EU and the IMF came to an agreement to rescue Greece over the weekend and the European Central Bank and the U.S. Federal Reserve also agreed to play support roles in the bail-out. This news led to a binge of short covering that drove the market up strongly at the open. RUT gapped up at the open and hit $688 within the first half hour of trading, then RUT settled down and traded sideways until the last 30 minutes of trading, when it traded up to close at $690, up $36 on the day. SPX traded similarly, closing up $49 at $1160. Trading volume was down across the board from last week, down 30% on the NYSE and down 35% on the NASDAQ. The S&P 500 stocks traded just under six billion shares, still above the 50 day moving average but down significantly from Friday's levels.

The big question now is whether the Greece bail-out deal is really solid. The EU member countries still have to vote on this package, so we could have some future bad news if one or more EU countries balk - how will the markets respond? Based on last week's trading, one has to be concerned about that possibility.

My May iron condor on RUT is skewed a bit too close to the upside after today's big move with position delta = -$146 and theta = +$428. The advantage we have at this point is the acceleration of time decay as we near expiration. The June iron condor on RUT has moved into the black with a P/L of +$580, delta = +$39 and theta = +$60. Both the 580/590 put spreads and the 790/800 call spreads are well outside of one standard deviation from the current RUT value of $690. The VIX dropped from 41% to 29% today; if volatility continues to come in, the profitability of the June position will increase. I am inclined to think the fundamental attitudes on the trading floors have been changed by last week's wild ride. We should not interpret today's short covering as an indicator of continued bullish trading to the upside.

The markets opened this morning and actually traded upward for a few minutes before the dance to the downside began and lasted the rest of the day. The Nonfarm Payroll Report actually set a record with 290k jobs added in April, the highest since March of 2006. About 66k of those were temporary census workers. But the bad news was the unemployment rate as it ticked up to 9.9%. Apparently, a large number of people re-entered the market to search for jobs, pushing this number higher even as more jobs were being added to payrolls. Trading volumes remained at the record levels set yesterday; volume on the NYSE exceeded two billion shares both yesterday and today. Trading in the S&P 500 stocks exceed eight billion shares yesterday and was just under eight billion shares today (the 50 day moving average (dma) is about 4.5B). RUT closed at $653, a loss of $19 on the day while the SPX closed at $1111 for a loss of $17. RUT touched its January high of $650 during the day but rebounded a bit. SPX broke through its January high of $1150 yesterday and touched its 200 dma at $1096 before bouncing back upward. Gold set a new 2010 high at $1215.

As you might expect, my iron condors have been trampled in this stampede. The May put spreads were stopped out yesterday; today I opened new put spreads at 590/600 and rolled the calls down to 710/720. This positions both spreads outside of one standard deviation OTM and leaves us with a possibility of a gain of about $1000, based on the shaky assumption that the carnage is over. The greeks are excellent with delta = -$21 and theta = +$306. My June 640/650 put spreads were also stopped out yesterday. I closed the put hedges and established new put spreads at 580/590 today. This leaves my June RUT condor greeks at delta = +$30 and theta = +$67.

The question now is whether we have neared the bottom of this correction. The fact that the trading action both yesterday and today hit intraday lows and then bounced back upward is a positive sign, but we'll see.

Sorry I did not get to posting my blog yesterday. It was a crazy day and then I had my trading group webinar last evening. The economic news yesterday wasn't bad, although that wasn't obvious from the market's behavior. Initial unemployment claims declined to 444k from the previous 451k, and continuing unemployment claims dropped from 4.65M to 4.59M. But retail sales numbers came in weak. Concerns about Greece and the European Union were at the forefront of the traders' minds. It appeared this morning that the market might be stabilizing but now that isn't clear at all. If your stops closed out your put spread positions yesterday, be sure to keep your put hedges in place. That will minimize the losses. I will check back in after the market closes today.

Global sovereign debt worries continued to drag the markets down today, but the trading was not nearly as one-sided as it was yesterday. Reports that Moody's is preparing to review Portugal's debt for a possible downgrade didn't help the mood on the street. The SPX broke through its 50 day moving average (dma) and traded as low as $1160 before recovering a bit to close at $1166, a loss of $8 on the day. RUT hit lows of $691 ($694 is its 50 dma) before closing at $699, for a loss of $8. Trading volume remained relatively high but didn't increase over yesterday's huge volume, with a 1% increase on the NYSE, flat on the NASDAQ, and flat on the S&P 500 stocks; however, the trading volume of the S&P 500 remained above 5.2 billion shares, well above its 50 dma.

The dollar opened the day very strong, up over 1%, primarily due to the weakened Euro; this placed additional pressure on the stock markets and easing of the dollar's strength late in the day probably accounted for the modest intraday recovery. The ISM Services Index reported out at 55.4 for April, unchanged from March. ADP reported 32k new private sector jobs were added to payrolls in April (19k were added in March). The unemployment numbers will be reported Friday, but most economists are predicting little or no improvement from the 9.7% level. Virtually all of the economic data is consistently pointing to a slow, modest recovery in progress.

My May RUT iron condor spread stands at a P/L of -$1,700 with a delta of +$56 and theta = +$150; so we still have a strong 3 to 1 theta/delta ratio and the short puts are right at one standard deviation OTM. The June iron condor stands at a P/L of -$860 with a delta of +$27 and theta = +$64. So the theta/delta ratio is still over 2 to 1 and the short puts are just inside one standard deviation OTM. So now we wait to see if the other shoe drops...

Global sovereign debt problems overwhelmed all other news today to drive the markets lower with greater volume. Factory orders for March increased by 1.3%, beating expectations. Pending home sales for March rose 5.3%, greater than the predicted 5%. But this positive news was completely eclipsed by concerns that Greece's fiscal problems will spread through Europe and perhaps the world. RUT plummeted $23 to $710 while the SPX closed at $174, a decline of $29. Both indexes managed rallies into the close that made up for some of the losses. The key question is whether we should interpret that late buying as the markets having reached a support level or whether more losses are ahead for tomorrow. Trading volume was increased significantly across the board with a 27% increase on the NYSE, and a 29% increase on NASDAQ; the S&P 500 stocks traded about 5.2 billion shares. Yesterday's trading volume on the S&P 500 was the only session out of the last 15 trading sessions to be below the 50 day moving average. Normally, we would interpret greater than average trading volume as conviction for the resulting trend - but, in the last few trading sessions, we have had large moves with increased volume both up and down. However, we are setting lower lows, so maybe the long awaited correction has begun.

My May iron condor on RUT is in pretty good shape with a net P/L of -$1400, delta = +$22 and theta = +$157. However, the June iron condor will need adjustment if this market continues down tomorrow. It stands at -$1,100, delta = +$7 and theta = +$75. The position greeks are excellent, which allowed me to be patient with this position today, but we will require some adjustments for any further moves downward. This market continues to set volatility records; now RUT has traded with swings of over $15 for four consecutive sessions - very unusual.

Much of Friday's losses were recovered today, but trading volume was lower across the board. Trading volume fell 19% on the NYSE and 16% on the NASDAQ; trading of the S&P 500 stocks dropped below four billion shares and below the 50 day moving average. It appears that news of a bailout plan for Greece calmed fears in the markets but didn't result in unbridled bullishness either. The Greece bailout pushed the Euro lower which, in turn, boosted the dollar by 0.6%; surprisingly, the stock markets traded upward in the face of the stronger dollar. RUT ran up over $16 to close at $733 while the SPX closed at $1202, up over $15. These gains didn't quite erase Friday's damage, but it was close.

Economic news was modestly favorable; personal income increased 0.3% while personal expenditures increased 0.6%; construction spending in March increased 0.2%; the ISM Manufacturing Index increased to 60.4 in April, up from 59.6 in March. All signs are consistently pointing to economic recovery, but a very slow recovery; many economists are hesitant to be very optimistic as long as the unemployment figures remain so stubbornly high.

My May iron condor on RUT stands at a P/L of -$1,220, delta = -$42, and theta = +$184. The calls now stand at one standard deviation OTM while the put spreads are over two standard deviations OTM with 17 days to go. My June iron condor on RUT at 640/650 and 790/800 stands at a P/L of -$500, delta = -$42 and theta = +$77.

These certainly are volatile markets. RUT has traded up or down $15 or more (about 2%) during each of the last three trading sessions - wow! Tough times for delta neutral traders; stay on top of your positions; don't hesitate to make the adjustments when needed.

Today's economic news began with the preliminary GDP numbers for the first quarter of a 3.2% gain as compared with 5.6% in the fourth quarter. Personal consumption expenditures rose 3.6% from the fourth quarter's 1.6%. The Chicago Purchasing Managers Index (Chicago PMI) came in at 63.8, greater than the 60 that was expected; this is the highest PMI number since 2005. And the University of Michigan Consumer Confidence Index came in at 72.2, greater than the expected 71.0. All in all, it was pretty good economic news.

But the market tanked in response. 

RUT lost $21 to close at $717 while the SPX closed at $1187, a loss of $20. Trading volume was mixed with a 6% increase on the NYSE and a 10% drop on NASDAQ. The S&P 500 stocks traded over 5 billion shares, an increase from yesterday and this represented the 14th day above the 50 day moving average. As you might expect, the VIX gained 20% to close at 22%. Gold hit a 2010 high at $1181. The modest trading volumes don't suggest widespread panic selling, plus the RUT and SPX both remained above key support levels set over the past few weeks.

Today's move took my May 650/660 770/780 iron condor on RUT to a delta neutral position with a P/L of -$1,160, delta = -$3 and theta = +$137. It will be interesting to see what happens Monday. I believe there is a high probability of much of this loss being retraced on Monday. At least some of the selling today was the result of taking cash off the table as the details of the Greece bailout are finalized this weekend. Barring any surprises over the weekend, buyers will likely return to the table Monday. But that is the beauty of my condor trade: I don't have to predict Monday's market direction (but it is fun to try).

The markets bounced back strongly today with steady, significant increases on all of the major indexes. However, trading volumes were mixed with a 4% decline on the NYSE and a 13% increase on NASDAQ. Trading volume for the S&P 500 declined to 4.8 billion shares, down from yesterday's levels, but still above the 50 day moving average of about 4 billion shares. RUT closed at $738, up over $15 on the day, while SPX also tacked on $15 to close at $1207. The only economic news today was the unemployment claims numbers; initial unemployment claims declined to 448k from 459k and continuing claims declined from 4.66 million to 4.65 million - slow, steady improvement.

Today's huge move upward didn't help my May iron condor on RUT; the position P/L stands at -$1560 with delta = -$99 and theta = +$156. Adjustments will be required soon if this move continues. The delta of the $770 calls moved up to 14 today. It is worth noting that the broad large cap market, as represented by the S&P 500, traded down from its session highs after about 2:30 pm ET, but the small cap stocks represented by the Russell 2000 Index traded higher into the close. So this bullish run by RUT appears to be continuing. Thus, the recent defensive retreat of condor traders may not be over yet. But we trade what happens, not what we predict.

The markets opened up positively this morning but dropped after being hit with the news that Standard and Poors downgraded Spain's debt. The markets then largely just chopped sideways, but strengthened a bit just before and after the FOMC announcement that interest rates would remain unchanged. Then the sideways march resumed until the last hour when the markets sold off. Trading volume was generally down today with a 14% drop on the NYSE and a 3% drop on NASDAQ. Trading of the S&P 500 was down a bit from yesterday's huge volume, but still above average at about 5 billion shares. Late in the day, RUT gave back all of the day's gains to close at $722, up $1. SPX was able to recover from the late sell off a little better and closed with an $8 gain at $1191. The recent attention given to the debt problems of some of the European countries has the bulls reconsidering their posture. But most of the economic news and earnings announcements in the US markets have been positive - thus, the choppy sideways market today.

My May iron condor on RUT remains unchanged with a P/L of -$1,420, delta = -$43, and theta = +$150 - a very healthy theta/delta ratio with 22 days to go.

Traders started the day on a sour note as Standard and Poor's downgraded both Greece's and Portugal's debt. This served to weaken the Euro relative to the dollar, resulting in one of the strongest days recently for the dollar. A stronger dollar normally hurts the market because it makes it more unfavorable for U.S. companies to export their goods. However, a stronger dollar also makes it easier for the U.S. to finance its debt, but that's another story. So the markets were down across the board and with higher volume as well. The sovereign debt news overshadowed two positive news items: the Case-Schiller housing price index for February increased over January and consumer confidence numbers for April also increased. Trading on the NYSE was up 39% and up 15% on NASDAQ. Trading volume for the S&P 500 jumped up to six billion shares; this makes the tenth day in succession that the S&P 500 trading volume has been above the 50 day moving average. Now the question on everyone's mind is whether this is just the beginning of a correction, or a knee jerk reaction to the S&P downgrade news. The VIX jumped to 23% on today's market action. RUT closed at $721, dropping almost $18 and the SPX lost $28 to close at $1184. SPX has a strong support level at $1180-$1182 and today's intraday low was $1182. I'll be watching to see if that support level is broken tomorrow. That would be one clue that the trend may have changed.

I removed the call hedges on my May RUT iron condor today and it now stands at a P/L of -$1660, delta = -$48 and theta = +$143. The theta/delta ratio is strong at this point, but further movement downward would actually be helpful to this position. Tomorrow afternoon we hear from the FOMC. Everyone presumes the easy credit will continue; if that presumption proves to be incorrect, we may see additional moves downward.