The markets opened up a bit this morning but then just chopped up and down, largely sideways through most of the day. But the traders sold off in the last few minutes, perhaps taking some of their positions off the table to reduce exposure to the markets in the morning. Most European markets were closed today, so there is some concern about how they will trade tomorrow. If the European markets trade downward, they will probably carry the US markets with them. RUT closed down $8 at $641 and the SPX lost $14 to close at $1074. Trading volumes dropped off from Friday; the NYSE was down 44%, and NASDAQ was flat. The S&P 500 stocks traded down to about 4.2 billion shares, below the 50 day moving average.

Existing home sales jumped up more than expected with a 7.6% increase in April, presumably due to the Federal buyer's credit offered through April 30. But the number of existing homes for sale rose to the highest level since July, 2009. That will pressure sales prices downward. A few weeks ago, the focus on this news would have been the positive spin of the surprising increase in sales; but in today's market, the focus is on how this large inventory will depress sales prices and create more foreclosures. The mood in the markets has dramatically shifted.

I tried to add new call spreads to my June condor position today, but missed the opportunity as the market just traded down in the late afternoon. So I bought some July $650 puts at the close to hedge against a gap downward tomorrow morning. Now we wait and see what happens in Europe.