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Stocks gapped up higher on Thursday, maintained those gains for several hours, but reversed late thanks to some opinionated comments from a Federal Reserve Board Member, and a spike in oil prices from escalated tension in the Middle East, bringing inflation fears back to the forefront. It was a classic negative outside reversal day on the charts, which is usually very bearish, so can today's jobs report help the situation or will it add more fuel to the fire?

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The Dow was down for a third straight day yesterday but the broader indices were up, trying to regain some of the losses from Monday and Tuesday. We had some stronger than expected weekly employment data, a weaker than expected ISM non-Manufacturing report, and some comments from the Fed, and all that added up to a modestly higher day for stocks, although choppy, and the indices closed off their highs after filling in the overhead gaps.

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Stocks continued the April pullback yesterday as stocks gapped lower and while they fought back to close off the lows, the indices did post solid losses on the day. Higher yields hit the small caps particularly hard as the S-fund lost 1.5% on the day. The C and I-funds gave up about half of that, and bonds were down for a second day, although like stocks, they closed near the highs of the day.

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Last week the stock market pulled back early in the week but moved higher heading into the holiday weekend. Now we started a new week, a new month, and a new quarter on April 1st and, as the market loves to do, it took my repeated reminders that early April tends to be strong, and threw that on its head. It wasn't a terrible day with the Nasdaq closing positive and the S&P down just modestly, but the small caps, which had been leading recently, got slapped down on a day that seasonality followers ...

Stocks ended a choppy week of trading with some flat to mixed results on Thursday. We saw small gains in the Dow and S&P 500 (C-fund) while small caps led and the I-fund was down on another rally in the dollar. The F-fund was down as yields moved higher. We saw some good returns in the stock market in March making it 5-straight months with a gain for the S&P 500. That's actually a good sign.

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