The markets apparently liked what they were hearing out of Europe today (although there was a paucity of specifics), and so the buying commenced. SPX gained $21 to close at $1255; ironically, SPX gave up almost the same amount yesterday as it gained today. At one time, that would be considered an unusual coincidence, but not for 2011; this kind of volatility has become the norm. RUT behaved similarly to SPX, gaining $23 to close at $745. The VIX trimmed back to 26.4%, about where it was a week ago, after nearly reaching 31% yesterday. In spite of today's big gains, trading volume declined with 2.8 billion shares of the S&P 500 trading today; trading at the NYSE was down 13% and volume was down 10% on NASDAQ.

Economic data was minimal today with the University of Michigan Consumer Sentiment survey coming in at 67.7 for December, up slightly from November's 64.1.

My Jan iron condor on SPX stands at break-even with delta = -$45 and theta = +$87 on 20 contracts. The RUT 560/570 put spreads are all that remain of the December position, so they will most likely expire worthless next weekend.

So the European Watch continues; the next market moving news may well be some credit rating downgrade this weekend or next week. I believe this market remains a risky place for directional trades; use tight stops.

We had our first snow today here in Chicago - I offer that for those of you in warmer climates so you can gloat. Enjoy the weekend.