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Welcome back, one and all. How was your weekend? For those of you who are horse racing fans, Saturday's Kentucky Derby didn't disappoint, maintaining its status as the most exciting two minutes in sports. California Chrome lived up to the hype, and I wasn't surprised to see Danza show (I suggested both would do well in Friday's newsletter). But Commanding Curve? I gotta say, I didn't see that one coming. Nobody else did either, judging from the 37-to-1 odds on the horse around post-time.

Anyway, the surprising and not-surprising aspects of the 140th Kentucky Derby - how the favorite and the least favorite horses both did will - got me thinking about not just the art of picking horses, but how horse-racing wisdom may also apply to how we pick stocks. And yes, there are plenty of applicable lessons. Three of them, however, really stood out enough this year to pass those ideas along to you. In no particular order...

1. Diversification is (still, and always) the key.

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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.

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Well, well, well... I'm not one bit surprised the bulls hesitated here. The rally came to a halt yesterday when a couple of the key indices hit technical ceilings, and though the buyers tested the waters of slightly higher highs on Thursday, it's pretty clear traders just aren't ready to commit to a rally.

That's not to say things couldn't change, even as early as tomorrow. It's simply an observation that the rally has yet to get strong enough to actually bet on it.

Sticking with the S&P 500 as our proxy, today's close at 1883.68 and today's high of 1888.59 is pretty much in line with well-established technical ceilings. Until the final hurdle at 1895 is cleared, the issue is still in question, and like I mentioned to you earlier in the week, the market may actually need to go down a little before trying to form its next major bullish leg. The question is, how far down? Anything above the support lines around 1862 would be fine, but any move below that mark could be the beginning of trouble.

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Do you ever feel like the market takes on a persona of its own, and that persona is doing everything it can to torment you into making a bad decision? I do, and it sure seems that's what's going on right now. Stocks approached some key technical ceilings on Tuesday, but as has been the case since early March (and really since the beginning of the year), the bulls just haven't been willing to stick their necks out enough to get the market over the hump.

And to tell the truth, despite the market's current momentum, I'm still not sure we've sidestepped a more significant pullback. I know the market's main job is to frustrate as many people as possible as much time as possible, and one great way it could do that is to zig here just when it looks like it's going to zag.

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Well, we can't say we're surprised the market ended the week on a low note. Stocks got a little overheated over the course of late last week and early this week, and all it took was revisit of a known ceiling to cap the rally and hand the reins back over to the bears... at least for a day. Still, it's not like the market got pushed past the point of no return - there's a chance that today was simply a bad day, and the bulls could be back in charge again by Monday.

Yes, that's the long way of telling you stocks are still on the fence, trapped between a rock and a hard place.

The chart of the S&P 500 below is what it is. The ceiling at 1884 clearly held the line, finally repelling the bullish effort from the index. Yet, the combined 20-day and 50-day moving average lines at 1860 are still intact as a support level. Until/unless the index breaks out of that range, there's not a lot to talk about.