Spain's bond yields hit 7.3% and Europe's debt problems have returned to center stage. While reviewing the various news sites I monitor today, I was surprised by the number of "dooms day" articles. According to the headlines, the middle class is disappearing, everyone's in poverty and the next great depression has begun. I admit that the global economic picture isn't pretty and our economy is right behind Europe on the same path. But it just appears like the tone of all of the financial press just turned on a dime. It all strikes me as a combination of mob psychology and yellow journalism; of course, thinking for yourself has gone out of style since everyone has become so afraid of being accused of being politically incorrect. SPX opened lower this morning and proceeded down to $1338 before bouncing to close at $1351, down $12.  RUT closed at $779, down $13. Trading volume dropped from the high levels of expiration Friday with 2.6 billion shares of the S&P 500 trading. Trading on the NYSE was down 17% and trading on NASDAQ was down 10%.

SPX sliced through support at $1357 (this level was support twice in April and resistance once in June) and almost reached support at $1335, the low from just a few days ago. But the markets bounced strongly and stopped the bleeding, at least for today. Support should also be found at the 50 dma at $1333. By contrast, RUT's chart is much more ugly. RUT has gapped downward the last two trading sessions. RUT's low today at $775 is near both the 50 dma at $777 and the 200 dma at $774. In fact, the 50 dma is threatening to cross the 200 dma - not good. As you might expect on a day like this, VIX spiked upward to 20.5% but pulled back to 18.6% by the close of trading.

My Aug iron condor on RUT stands at a P/L of +$1,840 with delta = -$5 and theta = +$75. With today's price move, this position would have become much more profitable, but the spike in IV tempered that rise (remember: condors are negative vega positions). So, return to your bomb shelter and wait for the next dose of bad news. But our condors are doing well...