Ask any active trader this week what she is thinking and you will hear one or all three of the following: 1) AAPL's big show tomorrow, 2) the German court ruling tomorrow, and 3) Bernanke's announcement Thursday. But my sense is that the markets have decided that the German courts will approve the Euro Zone bailout and Bernanke will announce QE III. SPX gained $4 to close at $1434 and RUT gained $3 to close at $842. And this occurred on higher volume: 2.7 billion shares of the S&P 500 (50 dma = 2.4B). This appears to show traders taking bullish positions rather than taking their profits and hiding. If the German courts rule against the bailout, we could see a very ugly market to the downside tomorrow. I am inclined to think QE III is already baked into the current market levels, so if Bernanke continues to communicate the same message of the past few months (i.e., "we will act if necessary"), I doubt that will cause a huge downward move. In any case, the name of the game is waiting. VIX moved lower this morning, but then strengthened to close at 16.4% - hedging is the name of the game.

As mentioned earlier, we have the German court decision tomorrow, then unemployment claims, the PPI and Bernanke on Thursday. Friday brings the CPI and the consumer sentiment numbers. The next couple of days have the potential to be very volatile.

My Sept iron condor on RUT stands at a net P/L of - $3,300 with delta = -$30 and theta = +$298. Time decay is starting to help this position each day, but we are now sitting in a fairly narrow window of profitability. The October position stands at a P/L of -$170 with delta = -$45 and theta = +$70.

Now I will return to my "thinker" pose and wait...