After a significant drop yesterday, the markets recovered all of those losses today. That brings us to the big question: is the bullish break-out real or is this just one more case of the price volatility that we have been observing repeatedly for the past year or so? SPX closed upward $19 at $2123 and RUT tacked on $16 to close at $1254. Volatility pulled in a bit at 13.3% on the VIX, but it didn't give back all of yesterday's spike upward. Trading volume also doesn't support the idea of  a strong break-out leading to another bullish leg higher. Trading in the S&P 500 was flat at two billion shares - no change from yesterday's sell-off. Trading volume declined 6.5% on the NYSE and rose 5% on NASDAQ.

The NASDAQ composite index made a new all-time high today and all of the financial news folks were touting that achievement.  But it was barely a new high and it is hard to put much credence in an up market trading on lower volume. So I wouldn't be betting the farm on a "super bull" or whatever the next leg upward is being called. I am making bullish trades, but they are carefully hedged positions.

My July iron condor on RUT is up 13% and the August position is up 6%. All this thrashing about in the markets is helpful for these delta neutral positions; we don't even have to worry about adjustments and hedges. But who knows what is coming? This down $22 one day and up $19 the next day is a little unnerving.