The Standard and Poors 500 Index pulled back to support with a close at $1409, down $7 and RUT closed at $821, down $1. But trading volume fell off dramatically with 2.3 billion shares of the S&P 500 stocks trading.  Trading volume fell 22% on the NYSE and dropped 19% on NASDAQ. Volatility rose almost a full percentage point with VIX closing at 16.6%.

The ISM manufacturing index reported out at 49.5, a large decline from last month's 51.7. Construction spending rose 1.4% in October, a bright spot in recent economic reports. The ADP private payroll numbers are due out Wednesday and the non-farm payroll report, aka the jobs report, comes out Friday morning before the markets open.

My Dec iron condor on RUT has been adjusted several times now and stands at a net P/L of - $4,020 on 20 contracts (-18%) with delta = -$134 and theta = +$147. I will roll up the 690/700 put spreads to salvage a portion of this trade later this week.

Based on my reading of the political tea leaves, the probability of going over the fiscal cliff seems greater every day. Even if everyone declares a deal accomplished, it won't substantively address the economic problems facing us. We won't be able to avoid a second recession in 2013. In case you are one of those who believed the President's "fairness" rhetoric, consider this factoid. If we confiscate all of the wealth of the Forbes 400, it will pay off the debt we are generating for only one year. We are generating 4 billion dollars of new debt each day...