The markets were expecting good news from Bernanke as he testified before Congress this morning. The markets opened in positive territory and traded up as Bernanke testified. Interestingly, as this was going on, the VIX was also moving upward. That turned out to foretell the market's disappointment in Bernanke's remarks. Traders were expecting a promise of more quantitative easing, but Bernanke held his cards close and the markets retreated.

SPX traded as high as $1329 before retreating to close unchanged at $1315. RUT closed down $5 at $760. Trading volume also dropped off with 3.0 billion shares of the S&P 500 stocks trading. Trading volume on the NYSE was off less than 1% but volume was down 7% on NASDAQ.

VIX closed the day down less than half of a point at 21.7% - still at anxious levels.

My June iron condor on RUT now stands at a net gain of about 9% with delta = +$26 and theta = +$104. Currently, the 690/700 put spreads are about two standard deviations OTM, so I may or may not close them tomorrow. The July RUT condor stands at a net gain of 7% with delta = -$14 and theta = +$66.

It appears we are on a cusp here: has the last couple of days been a brief short covering rally in an otherwise bearish trend downward? Or is the bullish trend resuming? It is too early to tell. Watch $1295 on SPX. If we close below there, watch out below.