The April job report is indeed an interesting outcome we can all agree on. Initially, the expectation for 1 million new non-farm payroll jobs today was a bit unrealistic. We saw a figure of 266k, which is a respectable number, higher than the mean of 107k and the median of 211k from the last 10 years since 2011. This indicates that the job market, while not spectacular, is faring better than expected.

Understanding Market Volatility

It's been a goofy week. On Monday, the economic indicators showed promise, particularly the PMI (Purchasing Managers' Index), which remained impressively high despite some slight dip. However, Tuesday brought a surprising and unwelcome pull back in the market, creating a peculiar situation where previously positive economic news seemed to trigger a decline.

The commodity markets, especially lumber and corn, reached historic heights, soaring due to the increasing demand. This surge was unexpected and made it difficult to predict market trends. The financial market’s movement was marked by a sharp sell-off, which seemed inconsistent with the overall economic performance. The belief in starting a new leg of a sell-off on Tuesday seems doubtful, suggesting that the initial panic might have been overhyped.

Several factors contributed to the market’s irrationality, including:

Ethereum and Ethereum Classic experienced tremendous growth, indicating a shift in investor sentiment. Dogecoin also saw a significant surge, suggesting a broader movement in the crypto market. The Canadian Dollar gained strength, gains unprecedented for a typical week, pointing towards external factors.

Market Rationality and Future Trends

The dow and SPX showed resilience amidst the volatility. The weak market in the short term might be a temporary anomaly rather than a significant trend. The recent job report, along with other positive indicators, indicates that the US economic engine is still robust. This resilience underlines the idea that unless there is a clear, substantial reason, the market might revert to its upward trend.

Traders and analysts need to remain vigilant, keeping in mind the famous phrase, 'the market can stay irrational longer than I can stay solvent.' Despite the short-term fluctuations, the overall trend remains positive. Investors holding long-term positions are likely to benefit from continued economic recovery, driven by the growing job market and increasing consumer confidence.

As the market closes, there's always the possibility of unexpected turns. However, based on the current data and recent trends, it appears that we are heading towards a strong close for the week. The ongoing recovery in the face of the coronavirus should continue to drive the market upward.

In conclusion, today's events signal a potential reversal of the irrational down week, with no significant reason to break the positive trend. The positive payroll number and resilient performance of key indicators suggest a strong closing week for the market. Let's stay optimistic about the future performance of the Dow and SPX.