An old friend of mine used to say, "he's as nervous as a long tailed cat in a room full of rockers". That describes the current market climate pretty well. Before the market opened this morning the S&P futures were pointing to a positive opening, based on some positive earnings announcements and the upward revision of the second quarter GDP. And the market did open and trade up, but it didn't last long. The Chicago Purchasing Managers Index (PMI) for Sept was released a few minutes after the market opened and stocks plummeted. The ADP payroll data showing the loss of 245k jobs in September didn't help - and this sets up anticipation for the jobs report Friday. It is hard to predict the direction, but a volatile reaction to the Friday jobs reports appears likely.

I don't know if many of you follow candlesticks as a technical indicator. I am not a "true believer" but I do think the interpretation of the basic candlestick pattern does have some merit. For example, today's candlestick on RUT and SPX wasn't quite what they call a "hanging man" - the tail was not nearly long enough. But think about what that pattern tells us about the "tug of war" in the marketplace. The bulls had control for a few minutes this morning and drove the prices up, but quickly were overrun by the bears and they took it down near the lows of last week. But then the bulls reasserted themselves and pulled it back and erased much of the loss before the day ended. My conclusions are: 1) the bulls remain the dominant force in this market; they have repeatedly come in the market late in the day and pulled this market back up. But 2) there are a lot of nervous traders in the market that are ready to turn bearish in a split second. So we have a bullish trend, but it is hard to predict what might cause a panic run to the exits that the bulls will be unable to contain.

My limping Oct condor is doing well, or at least as well as one can expect with a P/L of -$605, delta = +$11, and theta = +$112. I didn't point it out earlier, but when I rolled the calls and puts of this condor upward, I could have increased the size of the position and salvaged more profit; but that would have increased the risk of this position, and I am trying to show how a conservative trader can manage these iron condors. If the market continues trading sideways, this position will break into the black early next week, but I will have a minimal profit for October, if I salvage a profit at all. The Nov condor is faring well with a P/L of -$40, delta = -$25 and theta = +$78. Hang on for the ride...