Attention will start shifting to tomorrow's Employment Report. My finger to the wind prediction is that we will finally see a strong report. Private numbers have been showing a stronger job market and the government figures might finally catch up. Yesterday, Challenger, Gray & Christmas announced that January layoffs were the lowest in nearly twenty years.
It is difficult to predict what the reaction would be to a strong report. Weak reports have been seen as positive because it means the Fed will continue to print money. My inclination would be to short into a positive reaction to the report as I believe this market has more corrective action in store.