Today's market was significantly different than recent volatile days of trading in that the market just traded down and down and down. It appeared that the SPX had bounced off of its 200 day moving average (dma) yesterday but it just sliced through that level and is threatening to break through the low of $1065 set in the so-called flash crash on May 6. SPX closed at $1072, down $43 on the day. RUT behaved similarly with a drop of $34 to close at $640. RUT's low on May 6 was $638. The markets had staged a rally and started to recover some of the losses this afternoon, but then dropped to new lows for the day after hearing that the Senate had taken one step closer to financial reform. The markets are running scared due to the European debt crisis and the uncertainty surrounding financial reform in the US markets. Not surprisingly, today's huge drop occurred with increased volume; trading on the NYSE increased 28% and increased 30% on NASDAQ. Trading in the Standard and Poors 500 nearly reached 7 billion shares. The surprise of an increase in unemployment claims to 471k from 446k probably didn't help the mood on the street today. However, continuing unemployment claims decreased by 40k to 4.625 million.

I took my largest loss ever in my May RUT iron condor (-$8,080) today. That is what happens when you violate your own rules. I should have closed this position last Friday or Monday morning at the latest. The June position is now also under pressure with a P/L of -$2,080, delta = +$56 and theta = +$40. So now everyone speculates on whether we have hit bottom or not. The futures can change a lot over the next sixteen hours, but they are down right now, suggesting more losses tomorrow. All of the talking heads are negative at this point; if you are a contrarian, that may be a good sign.