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Good Morning. After four months of watching the bulls march merrily higher on a daily basis, with nary a bout of volatility to be found, suddenly we're back to what is beginning to feel like the bad old days of 2011. A market that had no memory from one day to the next. A market that gave the word volatility new meaning. And a market where investors were forced to watch any and all headlines from countries they'd only visited (or dreamed of visiting) on vacation as well as securities they'd never heard of before. (Come on, admit it; did you really watch European debt spreads against the bund before last summer?)

Yep, that's right; it appears that the good old days of watching Apple (AAPL) defy logic as well as gravity might be ending. And in case you don't spend at least a moment or two of each and every day checking in on all things Apple, the world's biggest company appeared to be almost human on Friday. AAPL shares sank nearly 3% and are now within six bucks or so of breaking into a downtrend - the horror! And after the way Google (GOOG) traded Friday after its earnings report, tech may be a problem if it doesn't perk up soon.

And then there are the banks. Don't look now, but all of that Q1 good cheer appears to be fading fast as the KBE (SPDR bank index) got smoked on Friday. Perhaps it was the earnings from Wells Fargo (WFC) or maybe somebody didn't like Jamie Dimon's numbers over at JPM, but if the XLF sees another day like Friday, we could be back to misery in the financial sector right quick.

Whenever the character of the markets shifts - and especially when that shift is sudden - it makes lots of folks scratch their heads. For unless you know that constant change is simply part of the game, you may be frustrated by the realization that the strategy that had been printing money for you (can you say "buy the dips" - all the dips?) is suddenly not working.

While I am willing to hold out the idea that the dip buyers may return to the game just as quickly as they abandoned it over the last two weeks, it appears to me that the character of this market has indeed shifted. The reason behind the quick rule change in the game appears to be the idea that investors are now anything but certain of the themes that had been driving the markets steadily higher from late-December through the beginning of April.

In short, the BTE theme (better than expected economic data) has suddenly been replaced with reports that inspire a shoulder shrug. The idea that Europe and the euro (you can watch FXE) was out of the woods has been met with calls for help from Spain (EWP) over the weekend. Next, the hope that the Chinese would start stimulating their economy hasn't exactly panned out yet and the FXI got tagged in March. And finally, the idea that the stock market is going to get another QE fix appears to be fading fast after last week's crush of Fed commentary.

So, from my perch it looks like we're back to that - the thing that the markets hate the most - uncertainty. And unfortunately for almost all of us (well, anybody that doesn't have a super computer parked next to the NYSE's data feed, that is), uncertainty in the markets means the return of volatility. So if you have the gumption to do so, adding some VXX, VXZ, or TVIX might be a profitable way to play the coming months.

In sum, there are plenty of reasons for the bears to be on the comeback trail here. And what this means to you and me is that the violent swings on headlines from places far, far away are back. Yep, we just might be back to that.

Turning to this morning ... U.S. futures seem to be following the European rebound in the early going. But with a big batch of data and earings on tap this week, the opening gains were muted early. However, the Retail Sales number (see below) has perked things up nicely.

On the Economic front ...The Commerce Department reported that Retail Sales were up +0.8% in the month of March, which was above the consensus for +0.3%. When you strip out the sales of autos, sales were up +0.8%, which was above the consensus for a reading of +0.6% but below last month's level of +0.9%. And when you take out autos and gasoline, sales were up +0.7%. All in all, a very good report.

However, he Empire Manufacturing Index (designed to indicate the state of the manufacturing sector in the New York region) for April was reported at 6.56, which was well below the consensus expectations for a reading of 17.92 and also below last month's reading of 20.21.

In addition, we'll get Business Inventories and the NAHB Housing Index later this morning.
Thought for the day ... Regardless of the colors on the screens, make the decision to enjoy your day.
Pre-Game Indicators
Here are the Pre-Market indicators we review each morning before the opening bell ...
  • Major Foreign Markets:
    • Australia: -0.49%
    • Shanghai: -0.09%
    • Hong Kong: -0.44%
    • Japan: -1.74%
    • France: +0.86%
    • Germany: +0.77%
    • Italy: +0.72%
    • Spain: -0.38%
    • London: +0.71%
  • Crude Oil Futures: +$0.08 to $102.90
  • Gold: -$7.50 to $1652.70
  • Dollar: higher against the yen, euro and pound
  • 10-Year Bond Yield: Currently trading at 1.979%
  • Stock Futures Ahead of Open in U.S. (relative to fair value):
    • S&P 500: +6.29
    • Dow Jones Industrial Average: +71
    • NASDAQ Composite: +12.01
Positions in stocks mentioned: AAPL
Source: Daily State Of The Markets: And We're Back To That ...