The markets opened upward this morning, then collapsed to hit lows around 1pm ET, and then turned around and proceeded to steadily climb all afternoon. SPX closed at $1843, up $12 and RUT closed up $4 at $1119. The VIX lost a half point, closing at 15.6%. Trading volume rose strongly today with 2.5 billion shares of the S&P 500 stocks trading. Volume jumped 18% on the NYSE and rose 27% on NASDAQ. I am tempted to conclude that this afternoon's steady climb had that strong volume underscoring the move, but I'm unsure that any of the normal rules apply to this market. A strong march upward with increased volume and a drop in volatility would normally be a bullish sign, but this is a fickle market.

SPX traded down as low as $1816 before rebounding. This is the third day for SPX to find support around $1816. Also note that SPX closed above the old support, now resistance, at $1840 - that's a positive sign. RUT broke down through its 200 dma, but bounced upward. Again, RUT has spent the last three days treating the 200 dma as support. All of this adds up to support for this market and an end to the recent pull back. But I remain cautious.

The CPI for March was released with an increase of 0.2%, and the Empire manufacturing survey collapsed in April to 1.3 from March's 5.6. Such a large move makes me wonder if there was an error somewhere. The NAHB housing market index remained steady at 47 for April, up one point.

For those of you trading am settlement options like SPX and RUT, don't forget that the exchanges will be closed this Friday, so tomorrow is the last day you can trade those positions before going into expiration. The settlement prices will be determined on Thursday this week.

I took advantage of RUT's strength this afternoon and closed my April put spreads. RUT may trade higher tomorrow and make me regret that, but I decided safer was better. Actually, I have been kicking myself for not closing them last week, but that's another story.