Bernanke and company have certainly lit a fire under this market. After a very strong day yesterday, the rally continued as SPX gained $6 to close at $1466 and RUT tacked on $9 to close at $865. Trading volume spiked up to 3.6 billion shares of the S&P 500 stocks; this is the highest trading volume on the S&P 500 since March, in the midst of the rally earlier this year. Trading increased 9% on the NYSE and was up 6% on NASDAQ. Oddly, the VIX opened lower at 13.8%, but actually increased by about a half point to close at 14.5%.

Some of the economic data released today was positive, starting with the University of Michigan Consumer Sentiment reading at 79.2 for September, up from 74.3. And retail sales increased 0.9% in August. But the balance of the data was mediocre with industrial production dropping 1.2% in August, capacity utilization dropping to 78.2% from 79.2%, and business inventories rising 0.8%. One could view the inventory data in a more positive light by suggesting businesses are seeing more demand for products and increasing production. But that may be a stretch. More likely, sales are soft.

In the past two instances of quantitative easing, the ensuing rally lasted for a shorter period of time after each announcement. Will this one be different since the Fed didn't specify a definitive end? Or will the euphoria wear off pretty quickly?

The only remaining positions in my September condor are the put spreads and the Oct call hedges. These positions are mitigating some of my losses. The current P/L of my 20 contract position is now -$3,820 or about 13%. I also closed the call spreads in the October position today. I will roll those up and reposition them as soon as this rally moderates a bit. This leaves the October position with a P/L of -1,720. The Greeks for either position aren't particularly relevant since these are no longer delta neutral trades. I rolled the 710/720 puts in October up to 790/800. As soon as I reestablish the call spreads, this position will be back in the black.

This has been a rough couple of weeks for iron condor traders. I will be happy to relax this weekend and leave the market behind for a couple of days.