Today's Jobs report is released at 8:30 a.m. before the market opens. The report is not likely to save the market and if it comes in under estimates it could crush stock prices. Which brings us to our warning: If the market sets up for a plunge today look out for another emergency rate cut from the Fed. Rate cuts have been busting short set ups for the near term making it tough to make a profit. If the Fed hacks rates again today we suggest covering your short positions immediately.
Outlook:
Unless the Fed steps in with another emergency rate cut January lows are likely to be tested. And, considering the aggressiveness of recent selling, January lows may not act as support, but rather a milestone on the way to an extreme target of $123.00-$122.50. A move to this area would be ideal and would set up an excellent buy opportunity for a countertrend rally.
Understand though that this is just one potential scenario. Another scenario that could potentially unfold would be for the SPY to find support at its 200-week average at $129.50 where it would create a higher low.
*Assuming the Fed doesn't come in with another emergency rate cut. If they do, we suggest everyone lock in profits on their shorts immediately. Keep an eye on the news before the market opens. This is especially true if the jobs report comes in below estimates. Such an event could be what triggers the Fed to cut rates. News Source
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