And yet again...another good week!

Driven by the unemployment report (see below) it was a rather volatile session. The market opened stronger but reversed south soon after. The major indices went negative before reversing up. from there we entered a lasting uptrend which led us to the session highs which were made about an hour before the close. Stocks fell back just a little bit during the last hour and the Dow finally closed + 165 points or + 1.95 %.

Stress test results were released after the close yesterday. The 19 banks need to raise in total about 76 Billion US-$ to satisfy the capital requirements imposed on them now.

The numbers is pretty much exactly what was expected. (since certain members of the administration were busy releasing tidbits into the market over the last week).

The number is big but also manageable. Perhaps most important...at least for now the perception in the market place is..."that's it". There is not much more which needs to be done beyond the capital requirements published via the stress test.

Today's main event was of course the unemployment report. Since the stress test results were pretty much known to the market and thus presented no surprise to anybody it was up the monthly unemployment report to deliver the news which moved the market today.

The economy lost a total of 539 thsd jobs during the months of April. The number was much better than expected. Analyst had called for a net loss of about 631 thsd.

Clearly...the number was better than expected. However...as part of the number the government added 62 thsd jobs for the 2010 census. (every 10 years....last one was 2000). Once you take those numbers out the revised number is 601 thsd ...not that much of a difference to the 631 which had been expected.

The market was happy since the number was smaller (and getting smaller versus the March number) than the consensus had been.

I am kind of sitting on the fence whether I believe this number signals something really positive. Whether we loose 539 thsd or 610 thsd Jobs...the way I look at it is that either number is to high.

At the current time the down trend is what counts and the number got smaller...so this good news.

Today's price action was volatile. Stocks turned south soon after the opening but regained their footing and started the up trend which lasted the whole day.

I am the first one to admit that it seems that I am guessing the market wrong right now. I have been neutral for about a week now and have been expecting a pullback of some form.

Even though the market has been proving me wrong I am not ready yet to abandon my position. Intraday volatility has been increasing and this is often times consistent with a market reversing trend. Also...the Nasdaq (which had been leading the market up) has now underperformed the overall market for a third day in a row.

Regardless...all of the major indices managed another positive weekly close and there seems to be little which can stop the current advance.

I remain neutral stocks right now and believe my "rubber band theory" is still viable. After the greatest advance the stock market has seen in more than 70 years some form of consolidation/pullback seems inevitable.

Have a great weekend,

Steve Benger