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What's up with this Elmer Fudd market?

Go 'thataway'

By Stephen Guilfoyle | @Sarge986

Good Afternoon,

You've all seen the cartoon, though it may have been a while. Elmer Fudd asks what he thinks is a police officer (actually Bugs Bunny) for directions. Bugs Bunny then tells him to go "thataway," and crosses his arms pointing in both directions. Welcome to money management, 2016 style.

Stocks, bonds, commodities ... currencies. Which way will they go? Thataway.

This does not mean that we throw our collective hands in the air and say that this is impossible. This is not impossible. There is—and always will be—a way. You are going to have to be prepared to stay on an even keel, though.

The volatility in asset prices that we are currently experiencing may just be getting started. After all, none of the hurdles facing financial markets are close to being successfully resolved. Sick to your stomach? That's an excellent place to begin.

What's happening this afternoon

So far, some things are moving higher, some things are moving lower. Likely we are waiting to some degree for the jobs number, especially after receiving some mixed signals from the employment arena over the last two days. In case you have been preoccupied, the April ADP print and the April Challenger total for layoffs were both surprisingly poor. Yet, Gallup, a firm that releases employment data a day ahead of the BLS, showed sharp improvement for the month. Gallup's data usually runs at higher levels than the numbers put forth by the BLS, but they do usually trend together.

1) Obviously, crude is your lead story today. WTI traded above $46 and is still above $44, which is a gateway to a lower range. This has the energy sector easily out-performing the rest of the S&P 500.

2) Speaking of the S&P 500, we have already seen the 2053 level work twice today as support. This is after that level worked multiple times as resistance for most of the Wednesday trading session. If we can get some breakaway speed this afternoon, I would like to see the index make a run at 2063.  If we are forced into a retreat, a stand could be made at 2046, but 2041 remains the level that gets me a little nervous.

3) You may want to take note today that the weakest industries within the consumer discretionary sector today are the various types of retailers. Chain store sales startled traders to the downside this morning.  Most of the retailers start reporting quarterly earnings next week, and retail sales will be the highlight macro event for next week. Jobs day is still the number one focus right now, but keep retail in mind as food for thought as you prepare over the weekend.

4) Let's talk safety. The trading public does not seem all that concerned at this point. The utility sector and the VIX are lower on the day, while Treasurys of all maturities are fairly close to flat. Gold is higher (marginally), despite a stronger U.S. dollar, which may say more about gold than safety seeking.

5) Mets, Cubs, Nationals. The American League may have to drop the DH rule if they want to produce some offense.

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