I'm sure you've heard the employment news already. I seriously hope you didn't jump to any conclusions yet, however. As we do at the beginning of every month, we're going to dive deeper into the unemployment data. And today, there's a huge "rest of the story" you didn't hear. Yes, the unemployment rate fell from 6.6% to 6.3%, and we created 288,000 new jobs in April, easily topping the predicted 210,000 new payrolls. There's just one problem with the numbers - there are fewer people working now than there were in March. In March, 145.742 million (seasonally adjusted) people had jobs. As of the end of April, only 145.669 million people have jobs.... a difference of 73,000 people, to the downside. The obvious follow-up question is, how do we add jobs yet have fewer people working? The basic answer is, because the DOL doesn't insist ALL the math adds up. I don't know why they don't, but they don't, and that's that. Again though, we may have created 288,000 new payrolls in April, but there are fewer people working now, as measured by the seasonally-adjusted employment figure. That being said, I can tell you exactly why the unemployment rate plunged so significantly. It's because a bunch of people were removed from the official workforce, and therefore were/are no longer being counted in the "unemployed" group. There were 156.227 million people who had or legitimately wanted a job as of March, but there were only 155.421 million people who were in that group at the end of April. Simultaneously (and related), 9.753 million people are now officially unemployed, down from March's total of 10.486 million unemployed. When you remove 806,000 people from the "workforce" part of the equation that's used to calculate the unemployment rate, and then count 733,000 fewer people as unemployed, it's not hard to come up with what seems like a significant improvement in the unemployment rate. The real litmus test is the measure of (1) the percent of the population that considers themselves to be part of the labor force, and (2) the percent of the population that is actually employed right now. Both should be rising - or at least holding steady - if the jobs situation was truly improving. Trouble is, they're not. The labor force participation rate fell from 63.2% back to a multi-year low participation rate of 62.8% in April. The long-term norm is closer to 65.0%. Meanwhile, the employed-to-population ratio didn't budge last month, rolling in again at 58.9% last month. That's just a tad better than the multi-year lows being hit last year. The long-term norm is around 63.0%. To be fair, as a large swath of baby-boomers retires, the number of people (relatively) who want or have jobs should be pressed a little lower. The numbers we're getting are a little too extreme to chalk them all up to a hue number of new retirees, however. This is just good ol' weakness in the job market, despite April's superficial data. My point is, while the jobs situation isn't terrible [I've repeatedly said it's "pretty good"], it's nowhere near as strong as today's numbers would imply. That mediocrity isn't a bad thing, however. As long the Fed feels the economy could use a boost, it'll prolong what's left of its QE effort. Maybe we can get it extended into the early part of next year. Other than that, it's not like we can say consumer spending is going to soar anytime soon. ..... (sigh) Ya know, I was really hoping today was going to be the day. By that, I just mean I was hoping the bulls would take that one last, itty-bitty step, push the indices beyond a huge - and catalytic - technical ceiling, and rekindle the rally that's been trying to get going for weeks now. No dice. The bulls made a modest effort, but as has been the case too many times of late, the bears dug in again, taking profits while there were some nice profits to be taken. We remain stuck in neutral. We'll limit our look to the S&P 500 today, though know that the chart of the Dow and the NASDAQ look about the same. When it became crunch-time and the buyers were going to have to commit to something a little riskier - like a move above a ceiling at 1895 - they just couldn't get the guts up to do it. Instead, the bears took over again, pushing back just enough to convince any would-be buyers to pack it up early for the weekend. As before, there's still a decent shot the market could break out rather than break down. Heck, we're still very near a key pivot point. It's just getting real old seeing the S&P 500 along with all the other indices tease us, without actually getting us over the hump. I'm not going to say any more than that for today because, frankly, I don't have anything else new to say about the situation. The whole shebang is on hold, and though the bulls have remained in position for a much more potent breakout, I've got a feeling the uber-low VIX is holding us back. Don't worry about it for now; there's nothing you can do about it anyway. Let's just regroup on Monday and hope there's something worth talking about then. I'd even settle for a small dip, as that would clear the decks for another breakout effort. (Like I mentioned to you on Thursday though, the key to a healthy dip is not breaking under the floor at 1862.) Derby Picks If you're into horse racing in the least, then you certainly know tomorrow will serve up the annual "most exciting two minutes in sports." That's right - Saturday is the 140th running of the Kentucky Derby at Churchill Downs in Louisville, Kentucky. And like everyone else into horse racing, I've got some thoughts on how things are going to shape up shortly after the 6:24 pm EST post-time. I'll warn you now I pick stocks better than I pick horses, so don't take what you're about to hear as infallible. It's just for fun, or food for thought. On the other hand, if it makes sense, feel free to borrow any of my betting ideas. First and foremost, you almost have to like California Chrome to win. While I rarely like the favorite - nor the weak payout a bet on the favorite offers - Chrome is just ridiculously strong. Thing is, the whole field here is always strong, and from a payback point of view, there are too many other great horses that could be wearing the roses if California Chrome has his eventually-inevitable bad day on Saturday. I'm also a fan of Wicked Strong, not because I think he's got a shot at winning (at least no better than Chrome or Danza), but because I'm pretty sure he'll finish in the top three. That makes him a must-have for any trifectas and exactas. Ditto for Danza, although to a lesser degree. I doubt the post position (19) is going to be a problem for Wicked Strong, as he doesn't need to - or care to - lead early. Wicked Strong can finish strong, which could be a deciding factor for this 1 and 1/4 mile race; the longest race any of the contenders have run (that I'm aware of anyway) were 1 and 1/8 miles. That last eight of a mile may be just the edge a good closer like Wicked Strong needs. And of course, Ride on Curlin should probably be part of any exotic. The pedigree here is quite good. Ride on Curlin's lineage is, of course, Curlin (who did well with mile-and-a-quarter tracks and is one of horse racing's biggest-ever earners) and Magical Ride... a solid horse in her own right. And, whatever Ride on Curlin lacks in speed and stamina, jockey Calvin Borel can probably offset with good riding; Borel has won two Derbies with less-than-outstanding horses. Oh, and I've yet to figure out why Danza isn't getting more respect from the odds-makers and media. I can't help but wonder if the fact that nobody seems interested here is a good sign that we should be interested. (Yes, I have a thing about staying in the minority.) As for strategy, it's almost impossible to make any money trying to pick the win, place, and show for any given race, but it's especially difficult for a Kentucky Derby... where all the horses are great. The best shot you have is apt to be trifectas with Chrome, Ride on Curlin, Wicked Strong, and Danzaa (all combos). You can do an exacta box with the same horses, but for a little more money. If you were looking to improve your odds, you could add Samraat and Medal Count to your boxes for not a lot more money, but with a pretty good payback if you're right. With all of that being said, if you're looking for a second opinion about Saturday's derby, John Monroe over at the SmallCap Network Elite Opportunity has an even better grip on this year's field and who should do well. You'll see some of the same names I like in his picks, but you'll see some new names and thoughts too. He put his picks in the Elite Opportunity e-mail newsletter, but those newsletters are all archived at the members' page. You can access those archives - right now - by signing up for a free two-week trial to that stock-picking (and sometimes horse-picking) service. He's as good at picking horses as he is at picking stocks, so if you're looking for a little pre-race guidance, that's the place to get it. Here's how to get it, or cut and paste this link: https://www.smallcapnetwork.com/?vmpd_ckstr[click_track]=Newsletter&vmpd_ckstr_redirect=/pages/SCNEO/v1/