Traders were encouraged this morning after the University of Michigan consumer sentiment report unexpectedly increased to 84.9, up from October's 82.6. SPX traded as high as $1391 before falling off in afternoon trade. SPX closed up $2 at $1380. RUT rose $1 to close at $795. Trading volume dropped back to the 50 dma with 2.6 billion shares of the S&P 500 trading. Trading on the NYSE dropped 2% while trading volume on NASDAQ decreased 4%. The VIX dropped to a low of 17.7% before rising back to 18.6% at the close. SPX recovered and traded back above the 200 dma at $1381, but could not hold those levels and closed back below the 200 dma. RUT traded as high as $801 today, well below the 200 dma at $807.

Traders are looking for bargains with large short put positions being entered in AAPL and large long call positions in GOOG. These are aggressive traders trying to find the bottom. Until we get some definitive news regarding the fiscal cliff, it is dangerous to commit to a bullish stance.

I closed the 750/760 puts spreads in my November iron condor position for $0.46 today. Assuming the 860/870 calls expire worthless (seems like a safe bet), this position will result in a gain of $2,560 on 20 contracts or 15%. This brings my year to date results for the Flying With The Condor™ service to +35%.

My Dec condor stands at a P/L of +$1,380 or 8% with position delta = +$29 and theta = +$53 (on 20 contracts). The delta of the 720 puts stands at 11, so the put spreads are reasonably safe thus far - but that assumes the devastation has ended. That is far from clear. The wrong news coming out of Washington over the weekend could push us down much farther.

Let's put this ugly and depressing week behind us and focus on enjoying the weekend.