The jobs report came in with 288 thousand jobs and the unemployment rate dropped to 6.3%. The market popped on the news; SPX jumped very close to all-time highs at $1891 within the first 45 minutes of trading. But then we looked closer at the numbers, and the market pulled back.

SPX closed down $3 at $1881, but RUT gained $3 to close at $1129 (RUT is still trying to dig out of its hole). The VIX contracted a bit more to 12.9%. Trading volume also dropped with 1.9 billion shares of the S&P 500 stocks trading. Trading volume fell 6% on the NYSE and dropped 10% on NASDAQ. The underlying reason for the declining unemployment rate is what has driven it lower for the past several years - the Labor Force Participation Rate continues to fall. With this report, it hit a 36 year low at 62.8%. The true unemployment rate continues steady at about 11%.

So why didn't the markets collapse as so many have been predicting for so long? First of all, corporate America has figured out how to cut people and other costs and continue to make money in the midst of this recession. And let's stop kidding ourselves; this is a recession. Millions of people are not only out of work, they have given up looking for work. Food stamps recipients are at all time highs. Secondly, the Fed is still supporting this market through quantitative easing and extremely low interest rates. This provides a floor for the market, but it doesn't give traders much reason to be very bullish.

My May iron condor on RUT at 1060/1070 and 1210/1220 stands at +3% with delta = +$49 and theta = +$149 on 20 contracts. Now that we are down to the last two weeks, theta will start to really kick in for this position. We would be even more profitable if not for repeatedly hedging our put spreads. My June iron condor on RUT at 1040/1050 and 1220/1230 is already at +5% with delta = +$9 and theta = +$75 on 20 contracts. This position is nearly perfectly delta neutral.

Enjoy your weekend. Unfortunately, we are still dealing with 40 and 50 degree weather here in Chicago. And I received my property tax bill today; remind me. Why do I live here? Inertia?