Markets opened higher and SPX tried to break its old intraday high, but didn't quite make it. The consensus among the talking heads was that the bullish impetus was Italy finally forming a government. In any case, the bullish trend continued with SPX up $11 to close at $1594 and RUT gained $7 to close at $942. VIX remains low at 13.7%, but trading volume fell off markedly today with only 1.9 billion shares of the S&P 500 stocks trading. Trading volume fell 9% on the NYSE and decreased 8% on NASDAQ.

This bull run continues on the back of reasonable corporate earnings (but weaker this quarter) and the Fed's QE programs. The market averages are in lofty territory, so we are subject to an unexpected "bad" event. The correction could be nasty. A possible candidate is this Friday's jobs report. But the markets shrugged off last week's disappointing GDP report, so it is hard to predict. It may be a good idea to buy some protection in the form of SPX puts for your stock and option portfolios.The current low levels of volatility make protection cheap and, if we have a significant pull back, the spike in volatility will cause the value of those protective puts to sky rocket.

My iron condor on RUT for May stands at a P/L of +$1,400 (+8%) with delta = +$10 and theta = +$56. This condor is positioned well with 17 days to go until expiration. The 1010/1020 call spreads are just under two standard deviations OTM and the 840/850 put spreads are about two and a half standard deviations OTM. We may see some lazy sideways trading action this week as traders anticipate the jobs report Friday.