The non-farm payroll report, aka the jobs report, was generally more positive than expected with 236 thousand new jobs. The unemployment rate dropped to 7.7%, but a large factor in that drop was 130 thousand people dropping out of the search for work. One of the quirks of our government's method for calculating unemployment is that they use a survey of households to determine the labor force participation rate - as that number decreases the unemployment rate decreases. We don't count as unemployed those people who have given up searching for work. If the labor participation rate were 66%, as it was in December of 2007 before all hell broke loose, the unemployment rate today would be 10.7%. That may help you reconcile what you are seeing in your neighborhoods with the published unemployment rates.

A large factor in the increase in the jobs number was a bump up in construction due to a rebounding real estate market. And that is certainly welcome news. The positive jobs report surprise continued to fuel this bullish market run even higher. SPX tacked on another $7 to close at $1551 and RUT closed at $943, up $8. VIX dropped another half point to 12.6%.

Trading volume continues at anemic levels. Trading in the S&P 500 was 2.4 billion, still below the 50 day moving average. The last time we saw above average volume was on February 25th when the market pulled back, and the following day when it bounced. Trading on the NYSE dropped 1% and decreased 4% on NASDAQ. This trading volume picture seems odd. I see reports of the individual investor returning to the markets and bonds being sold to move to equities. That is consistent with a bull market, but where is the trading volume?

I applied my Two Sigma Rule to the March position today, but the 810/820 put spreads are far, far OTM, so I left them open to expire worthless. I closed the call spreads a little over a week ago.

Enjoy your weekend.