The Speaker of the House had only pessimistic remarks this morning about the negotiations on avoiding the fiscal cliff. That appeared to pull the markets back a bit after a positive open. Then Bernanke took the floor and announced additional easing from the Fed, plus surprising everyone by tying the low interest rates to unemployment rates. The markets appeared to jump a little after the FOMC announcement, but then traded off after Bernanke's press conference. SPX ended the day at $1428, up $1 and RUT lost $6 to close at $829. The VIX remains at 16%, basically a "middle of the road" number - not panic, but not complacency either. Trading volume was down a bit with 2.7 billion shares of the S&P 500 trading. Trading volume increased 5% on the NYSE but dropped 6% on NASDAQ.

SPX traded as high as $1439 before selling off in late afternoon trade. Maybe the $1430 resistance level from early September and early November will be hard to break. There is no denying the bullish trend on the chart since mid-November. The markets appear to have been assuming a deal was forthcoming on the fiscal cliff. Today's sell-off after returning to the pre-election highs may signal a loss of confidence that a deal will be done after all.

My December iron condor position stands at a loss of 15% with delta = -$162 and theta = +$318. the delta of the 850 calls retreated to 15, but those spreads remain uncomfortably close to the fire. Trading in this volatile market is taking its toll on everyone. Several of my friends have taken off for the holidays. They needed a breather.