The markets opened positively this morning on news that Standard and Poors had revised the outlook for our treasury debt from negative to stable. Then the major indexes dipped but  stayed in the black most of the morning. But the bulls couldn't make the gains stick. The major indexes chopped sideways most of the day and SPX closed at $1643, down $1 for the day. By contrast, RUT gained $5 to close at $993. Seeing small caps outperform the blue chips is encouraging, but the negative sign was volatility rising to 15.4%; it only rose about a third of a point, but that is clearly the wrong direction if indeed we are firmly back on the bullish track. Trading volume fell off significantly with only 2.1 billion shares of the S&P 500 stocks trading today. Trading volume on the NYSE was down 15% and volume on NASDAQ dropped 6%.

We may not have the incredibly bullish market trend of the past few months, but I have been impressed with this market's resilience in the face of all challenges. It seems as though the closest thing to a correction this market can sustain is a minor pull back or just some sideways consolidation. But it remains a nervous market, so be careful.

My June iron condor position on RUT stands roughly at break even with position delta of -$47 and position theta of +$209. At this point, it appears likely that my Two Sigma Rule will close the call spreads of this position on Friday; currently the delta of those short 1030 calls = 6, so it is reasonably safe at this point. The July condor stands at a net gain of $880 or +5% with delta = -$26 and theta = +$85. This position is essentially delta neutral with the delta of each short option at 7-8.

There wasn't any significant economic data reported today (outside of the S&P announcement). Later in the week, we will check up on inflation with the CPI and PPI numbers. The consumer sentiment numbers, industrial production and capacity utilization reports come out Friday. Barring any surprises in this data, I don't see any market-moving events upcoming - but those are always the famous last words before the surprise. Stay alert.