The markets opened weakly this morning but appeared to be just chopping sideways most of the day. Something changed around 2 pm ET. SPX closed down $30 at $1935 and half of that loss occurred in the last two hours of trading. But I can't find any news items that appear responsible. Several analysts blamed concerns over weaker European economies, but those reports came out yesterday and this morning. Why did everyone run for the exits this afternoon? RUT has been trading weakly all year and today was no different with RUT closing at $1076, down $18. RUT's 50 dma crossed below its 200 dma about two weeks ago and RUT is now $65 below its 50 dma and down 7.3% for the year. By contrast, SPX remains up almost 5%. RUT's close today was lower than any of this year's corrections, but SPX is still above the August low at $1910. Another day like today might change that.

Trading volume on the S&P 500 peaked on October 1st on the big drop that day and has steadily declined until today, when it spiked back up to 2.1 billion shares.  Trading volume rose 9% on the NYSE and rose 21% on NASDAQ. I may not understand the impetus, but a lot of traders were heading for the exits.

Volatility, as measured by the VIX, popped back up today, closing at 17.2%, up almost two points. That takes VIX back to the highs of the August correction. In fact, VIX only closed slightly above 17% in August.

Some observers probably thought I was being too conservative when I closed our October put spreads about ten days ago, but conservative looks good on a day like today. The October calls spreads on SPX at 2080/2090 are really far OTM now. I had thought my two sigma rule would close them on Friday, but it looks like we may let them expire worthless unless we get a strong bounce this week. My November condor on SPX at 1810/1820 and 2090/2100 is weathering the storm very well so far and remains modestly profitable (+4%). It is hard to imagine the 1810/1820 spreads being seriously threatened, but today's big drop has me thinking...