Stocks traded strongly upward today as the earnings reports and guidance from Alcoa and CSX encouraged traders about the strength of the U.S. economy. SPX traded up and hit its 50 day moving average (dma) at $1095 mid-day and pulled back; later in the afternoon, SPX broke through the 50 dma but pulled back and closed right at the 50 dma, $1095, up $17 on the day. RUT ran even more strongly to the upside and closed up $21 at $643. Trading volume rose today, increasing 28% on the NYSE, and 2% on NASDAQ. Trading in the S&P 500 stocks rose to four billion shares, but still well below the 50 dma. INTC reported its highest earnings in ten years after the close. Barring no negative surprises in the conference call, that may continue to fuel this rally tomorrow. Many institutional traders watch the 50 dma and the 200 dma as key levels of support and resistance. SPX broke through the 50 dma briefly today before being pulled back. That $1095 level will be crucial to watch tomorrow for a signal of whether this uptrend can continue.

I added a partial adjustment to my Aug iron condor today with a Sept $680 call. This position now stands at a P/L of -$2,895, delta = -$61 and theta = +$94. The hedge reduced our delta risk, but also reduced our positive theta. If this market run continues tomorrow, I will be adding additional hedges.