Interesting action today, but obviously things are and will be dicey. Just too much bi-polar thought, and action on the pi-polar thought by the big-boys, to expect other wise.
I liked the move today because when I see this type of strong burst, it bodes well. Here is a previous example...
This chart, from 2006, shows a break of the 320SMA then a strong burst to take it above (twice). Obviously painted with consolidation, and choppiness, with the 14 and 62SMA as the resistance points. With today's strong burst, the SP500 may see similar moves.
Today's market is in such a different trading dynamic then 2006, so a strong argument can be made as to why the chart I posted is ultimately meaningless. Although, I do think it provides an interesting reference of activity.
Earnings session is soon upon us, and I think plenty of large caps are at steep discounts to their earnings capabilities and growth. Hence the market inefficiency. The SP500 may see some resistance soon via the 1060 level or the 14SMA. If not, it may see it at the 1100 level or the 62SMA. Too soon to tell.
I do agree with El-Erian, that Jobs is a leading indicator. (The thesis of jobs as a leading indicator I think is a big reason why we are not seeing capitulation in the charts at low points. In other words, an oil tanker does not turn on a dime.)
The earnings story will be enough to push the market this summer, but the private jobs growth will tell the market how high it can go. As the Manpower CEO indicated, growth will be there, but it looks to be slow and steady.
With slow and steady jobs growth (or lack there-of), some large cap stocks will not see an earnings hit from subsided job growth and a slower economy. Like IBM, MSFT, GS, AAPL, F etc. Their vulnerability is in a contracting multiple from fund managers that will blindly sell everything, and not focus on an individual story. Or benefit via an expanding multiple if solid private job growth is present.