The bulls are clearly in charge. This morning, the market opened weakly and traded down a bit as the existing home sales report wasn't in line with analyst expectations. But then the major indexes solidified and headed higher. SPX gained $7 to close at $1493 after trading as low as $1481. SPX closed at its high for the day - classic bullish behavior. RUT ran up $6 to close at $899. VIX increased a bit this morning, but then stabilized at 12.4%, no change on the day. The only weak component to this bullish market was trading volume. Trading in the S&P 500 came in at 2.6 billion shares, a decline from Friday, but still above the 50 dma. Trading volume on the NYSE was down 6%, while NASDAQ was also down 5%.

Existing home sales came in for Dec at an annualized rate of 4.94 million; analysts were expecting 5.1 million. Now, some analysts are predicting increased housing prices because of supply constraints. That seems amazing to me; we have had only bad news about real estate for so long.

My Feb condor position on RUT remains above water at a 3% gain with delta = -$72 and theta = +$96 on 20 contracts. I closed the 910/920 calls today and rolled them up to 930/940.

Since the first of the year, this has been a classic bull market in the sense that it has continued upward in spite of a host of reasons we should be bearish. We are trading upward in spite of no agreement on taxes, spending or the debt ceiling. Yes, everyone agreed on tax rates, but many voices are now calling for more revenues. And the President insists we don't have a spending problem. And the GOP has agreed to raise the debt ceiling without spending cuts. Unemployment in Europe is at record highs. These chickens will come home to roost someday, but this market is continuing higher...