Today, I would like to introduce to you a valuable indicator that comes from the options world and what it is telling us about the future for small cap stocks.

More than likely, you've heard its name on CNBC, Bloomberg or read about it in the Wall Street Journal or Financial Times. The indicator is the well-known and popular VIX.

It's the first day of the second quarter, and also April Fool's day, so be on your guard. The first day of the month has been an overwhelmingly bullish day ever since the stock market bottomed in March 2009. And the first day of a new quarter has also been bullish, as new money gets put to work by mutual funds.

Today we also have a strong non-farm payroll number to propel stocks higher.

The economy added 216,000 new jobs in March. This is a net number that includes job losses at the government level. Private hiring has now topped 200,000 jobs for two months running, for the first time since 2006.

The government published unemployment rate fell to 8.8%. And while that's still unacceptably high, it's an improvement.

Whether or not we can give the Fed any credit for helping the jobs market with QE2, today's jobs number increases the odds that the Fed will stand down in June, and not move directly into another round of stimulus QE3.

And while we've discussed the end of QE2 as a potentially bearish catalyst for stocks, it could also be considered a sign of confidence in the U.S. economy. I know that might seem like a stretch, and I still expect there to be some kind of correction ahead of June (sell in May?).

I know - I'm supposed to talk about gold or oil or coal again today. That's what you were promised as a reader of this publication.

I hope you'll forgive me, but today's missive has little to do with commodities.

I read an article that just can not go unmentioned. It's either the funniest and best written nod to George Orwell I've ever seen, or it's a frightening representation of the world we live in.

Before I go on, you should take a look for yourself - it truly must be seen to be believed.

They say March comes in like a lion and goes out like a lamb. We’ll see about that. March started with a strong rally that’s added +50 points, or 4.4% to the S&P 500. That’s as good a monthly performance as you’ll find. Perhaps too good…   

Stocks have come so far, some are now wondering, what’s left? And after today’s ADP Employer Services employment report showed that private companies cut payrolls by 23,000 in March. That’s a far cry from the gain of 40,000 economists were expecting from this report. And it raises the fear that Friday’s release of the Labor Department’s Nonfarm Payroll report will come in far short of the expected 190,000 jobs growth.  

Of course, the government’s report will include census workers, so it’s likely to better than the ADP report. But still, the market is left waiting for jobs growth.