The markets rose this morning on positive housing and consumer confidence numbers, but then the averages slowly declined all afternoon to close at or near lows for the day. SPX lost $15 to close at $1442 and RUT closed at $839, off $13 for the day. Trading volume picked up with 2.7 billion shares of the S&P 500 trading. Trading on the NYSE was up 20% and trading volume on NASDAQ was up 15%. The VIX increased a little over one point to close at 15.4%.

The Case Schiller housing price index increased 1.2% in July and consumer confidence came in at 70.3, up from 61.3. These numbers boosted the markets, but the euphoria was short-lived. SPX traded as high as $1463 before starting its slow descent. SPX has nearly given back the huge gains after Bernanke's announcement of additional Fed easing last week. RUT has now given back all of those gains, closing today near the $840 support level that was established after Draghi's press conference on September 6. SPX is sitting just above its support in the region of $1430-$1440. If we draw a trend line for this latest market rally that started in early June on the SPX chart, the bottom edge of this upward trend is $1430. So $1430 on SPX is a significant "line in the sand". Breaking $1430 could signal a break in this uptrend.

My Oct iron condor on RUT stands at a net P/L of -$940 with delta = +$57 and theta = +$94. Our theta/delta ratio is still strong, but the put spreads are beginning to be pressured. So the debate intensifies: is this bullish uptrend for real, or is a significant market correction around the corner?