The markets continued the recent pattern of trading sideways as SPX closed up $5 at $1461 and RUT closed at $880, up $5. Trading volume was flat with 2.5 billion shares of the S&P 500 stocks trading today; this is right at the 50 day moving average (dma). Trading volume was also flat on NASDAQ and up 3% on the NYSE. VIX inched up 0.2 points to close at 13.8%.

SPX traded up to resistance at $1465 this morning but then steadily declined into the close. Alcoa's better than expected earnings report set the stage this morning for a favorable market, but it wore off quickly. Some favorable earnings reports and optimistic guidance would be helpful for this market, but we don't have any significant blue chips reporting this week. Next week some of the big banks and Goldman Sachs report. Those reports may move the markets.

We are hip-deep in forecasts and predictions this time of the year. I am seeing a surprising number that are predicting a strong market for 2013. Given the headwinds constraining our economic recovery and the debt/spending debate, those predictions appear a little too optimistic to me. The only significant economic data expected for the balance of this week are tomorrow's unemployment claims. Analysts are predicting flat numbers on the order of 365k initial claims.

Increased theta decay as we near expiration (about $280 today on my 20 contract position) is helping my Jan iron condor on RUT to lessen its losses, which now stand at about 35% - rough beginning for the new year.