This market is playing out like one of those novels you read on the beach this summer - many interesting characters and just when you think the bad guy has left the story, he surprises you with his resurrection. In our novel the European debt crisis returns to the stage, this time focusing on Spain's debt issues. This derailed the mini rally we had going in the S&P 500 for the past few sessions. SPX gave up $14 to close at $1363 on 3.0 billion shares, a pretty hefty increase in volume, but it was expiration Friday. RUT closed at $792, down $11. Trading volume on the NYSE was up 16% and volume on the NASDAQ was up 3%.

SPX broke a significant resistance level at $1375 yesterday, but was unable to hold that today, pulling back into the sideways trading range. Corporate earnings are holding up reasonably well during this earnings cycle, but growth in both earnings and revenue is slowing. In addition, companies are being very cautious with their future guidance. I continue to think this market is caught in between some powerful forces. On the one hand, governments around the world are printing money to shore up their economies, plus global corporations have trimmed their balance sheets significantly the past couple or three years, so earnings are holding up in spite of signs of economic softening, if not outright recession. And then of course, we have the looming fiscal cliff here in the states with the inmates in charge of the asylum in Washington. In short, I think these forces are opposite in nature, but roughly balanced. Thus, we have brief rallies and then, just as the shorts have covered, the market heads back down. I'm not sure what will change in that picture for the balance of the year. 

My July iron condor position expires worthless this weekend; RUT settled at $795.27 (SPX settled at $1370.28). My Aug iron condor position stands at a net gain of $1,800 with position delta = -$33 and position theta = +$65. What a difference a day makes! With the expiration of the July position, our Flying With The Condor™ service stands at a year to date gain of 35%. By comparison, the S&P 500 is only up 8% for the year. That comparison will make me enjoy my weekend a bit more. Have a great weekend. Savor all the many beautiful things that surround you.