The markets opened strong this morning and steadily traded upward all day. The RUT and SPX have both reached critical areas on their respective price charts. SPX broke through the 200 day moving average (dma) at $1108 and closed at $1115. During much of May, the SPX traded in the range of $1100 to $1175. Today's close places the SPX right at the bottom of that range; tomorrow's price action will show whether it has truly entered a new trading range or whether it pulls back into the range of $1040 to $1105 of the past few weeks. The RUT chart is somewhat different in that RUT is well above its 200 dma at $634 and it has not yet broken out of its current range of $615 to $670. But RUT is similar to SPX in that it is sitting at the edge of the trading range - will it break out or pull back?

Trading volume continues to be rather weak and this does not bode well for a continued advance. Trading volume was up 2% on the NYSE and up 18% on NASDAQ, but the S&P 500 stocks traded about 3.8 billion shares, well below the 50 dma of 5 billion shares. I interpret this as a lack of conviction by the broad market that this rally has legs.

In the meantime, my condor positions are in excellent shape. The June 590/600 and 710/720 RUT iron condor stands at a P/L of +$1,096, delta = -$20 and theta = +$285.  Normally, I wouldn't be in a condor position during expiration week, but the extreme volatility of the past few weeks has forced me to leave this trade open to salvage a gain. The put spreads are well outside of two standard deviations and the calls are just inside of two standard deviations, so this trade is well positioned.

My July 520/530 and 750/760 condor stands at a P/L of +$1540, delta = -$26 and theta = +$88. This position is in excellent shape; if this rally continues, I will consider closing this position to lock in our current gains.