Stocks finished higher, but they were well off their highs. Just as yesterday saw a significant move higher in the final 30 minutes, today featured a sharp decline in the final 10 minutes, not driven by a notable market-on-close imbalance. I’d attribute the late-day selling to panic hedging ahead of Apple and Amazon’s earnings, as well as tomorrow’s jobs report.

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Not surprisingly, with the job report tomorrow, the VIX 1-day moved up to 27.5.

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The 1-month implied correlation index was also higher today, signaling that something wasn’t quite right with the market. Now, with earnings season essentially concluded following Apple’s report, we should see the implied correlation index continue to rise as the volatility dispersion between the index and individual stocks unwinds. Typically, when the correlation index moves higher, the S&P 500 moves lower.

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Also, a few notable points from today’s trading session: technically, the S&P 500 reached the 61.8% retracement level but failed to break through, potentially forming a shooting star reversal candle.

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It was the same story for the NASDAQ 100, which also hit the 61.8% retracement level and reversed, suggesting this could be an ideal point for the current leg of the rebound to conclude.

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If you wanted, you could interpret this as three waves down, followed by three waves up. That would imply there’s still one more major wave down ahead, potentially undercutting the lows set in early April.

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The problem, of course, is that we get the job report tomorrow. Kalshi is predicting an unemployment rate of 4.3%, which is higher than the estimated rate of 4.2%. Additionally, Kalshi predicts that 129,000 jobs have been created, in line with estimates of 130,000.So what happens tomorrow is mainly going to determine what happens next. It would take a bad number to get the market moving lower, and we haven’t had many of those, so it’s tough to say.

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