The markets opened up strong this morning and steadily rose throughout the day, with the major indexes closing at their intraday highs. Strong China export data may have helped shift the mood and the unemployment data showed modest improvement. Initial unemployment claims came in at 456k, down three thousand from last week, and continuing unemployment claims were 4.462 million versus the previous revised figure of 4.717 million. But this data takes on a different look if you graph the trend; initial unemployment claims peaked in March of last year, slowly declined to November and have been basically drifting sideways in the range of 440k to 460k since then. RUT closed at its high for the day at $640, a gain of $22. SPX also closed at its high for the day at $1087, a gain of $31. However, trading volume declined 14% on the NYSE and dropped 5% on NASDAQ. Trading in the S&P 500 fell back below the 50 day moving average to 4.2 billion shares.

My June iron condor on RUT at 590/600 and 710/720 stands at a net loss of $1544 with position delta = +$93 and position theta = +$326. This position still retains a profit potential of about $1300 if the RUT continues to trade in this sideways consolidation range. The July iron condor on RUT at 520/530 and 750/760 is now nearly perfectly delta neutral with a net gain of $700, position delta = +$2 and position theta = +$90. Today's strong gains on lower volume appear to support the postulate of the markets trading in a consolidation or basing pattern. For the SPX, that range is $1040 to $1107. For RUT, that range is larger, from about $607 to $670. A break-out to the downside on increased volume would signal a new bear market, while a break-out to the upside on increased volume would signal the end of the bull market correction. In the meantime, we may continue to see these large swings back and forth.