The markets leaped off to the races this morning, breaking all kinds of records, but then trading started to falter and the major indexes began to give back most of the early gains before the day was over. SPX closed at $1660, up $10 and RUT gained $13 to close at $997. SPX ran as high as $1674 before pulling back. Often these type of days when the bulls push a stock or index price much higher but can't hold those highs is a sign of a weaker market moving forward (the classic shooting star candlestick). At a minimum, one can consider today's intraday highs as a resistance level for break-outs to the upside. The $1660 level on SPX was resistance for a couple of days in mid-May, but I'm unsure that today's closing there is significant. We have had too few data points at these lofty levels to have solid resistance levels. Volatility rose a half point to 14.5%.

There were several positive news items this morning that contributed to the bullish tone of the markets. The Case Schiller housing price index increased 10.9% in March, as compared to a 9.3% increase in February, so housing is hot. Consumer confidence increased to 76.2 in May from 68.1 in April. And Moody's issued a report on the large banks and revised their rating from "negative outlook" to "stable". This was the first improvement in the bank rating since 2008.

My June condor position on RUT stands at a P/L of -$3,220 with delta = -$111 and theta = +$175. The 1030/1040 call spreads are right on the edge of adjustment. We'll see what tomorrow brings. The bullish influence seems unstoppable. Maybe trading sideways is the least bullish behavior this market can display.