Each day in the markets can be thought of as a tug of war between the bulls and the bears. Today's intraday pattern of trading was interesting. Both RUT and SPX hit their lows around 10:30 am ET, but then they diverged from each other. RUT traded sideways and closed at $1044, down $8 and near the low at $1043, whereas SPX recovered a fair amount of its losses, closing at $1691 for a loss of $6 on the day (the intraday low was $1685). Given that the RUT tends to lead SPX up or down, I find this divergence interesting. It suggests this market could go lower before it goes higher. With all of the talk about the Fed tapering and traders looking forward to the September FOMC meeting, I think the most optimistic near term course for the market is chopping sideways.

Trading volume today was pretty flat with 1.9 billion shares of the S&P 500 stocks trading (identical to yesterday and well below the 50 dma at 2.3B). Trading volume on the NYSE was down 4% and trading was up 8% on NASDAQ.

The VIX increased about one third of a point to close at 13%. As long as VIX remains reasonably calm in this 12-13% range, I doubt we will see a more serious sell off.

My Aug condor position stands at a loss of $1980 or -9% with delta = -$37 and theta = +$197. The September position stands at a P/L of +$880 or +5% with delta = -$17 and theta = +$78. Both positions are now delta neutral and well positioned, but who knows the future?