I'm starting to feel like a broken record. All week long we have been looking forward to Friday's jobs report. Now that we are here, about to see the results tomorrow morning, the market feels vulnerable. That's not too surprising. After a +8% rally in less than two weeks we are probably due for some profit taking. The question is how big will the dip be?
There is always a chance the jobs report unveils a better than expected number. How will the market digest it? Lately it seems like bad news is good news. Why? Because bad news means more fuel for the Fed to cook up another round of stimulus.
We are not adding any new trades tonight. The nonfarm payroll report for August will be released at 8:30 a.m., prior to the stock market's open. Thus the market will most likely see a gap open lower or higher depending on the jobs data.
FYI: I did notice that the U.S. dollar was moving higher today. Meanwhile the bond market looks poised to rally on a poor jobs number. The yield on the 10-year note could be headed for 2.0% again.