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The market is experiencing another “growth scare”.

Yesterday the Bureau of Labor Statistics released its Non-Farm Payrolls (NFP) data for September. Technically, it should be releasing the data for October, but the government shutdown stopped that data from being compiled. So, the market has to work with September’s data, which yes, is two months old.

The NFP came in stronger than expected with 119,000 jobs created compared to expectations of just 51,000. However, the unemployment rate rose to 4.4% from 4.3% which is a new cycle high.

This induced a panic as investors fear that the labor market is beginning to break, signaling that a recession is about to hit. When you combine this with the fact that the stock market was overdue for a significant correction, you get a bloodbath like the one that hit yesterday.

The S&P 500 has now taken out its bull market trendline. Even worse, it was rejected by this line yesterday, signaling that former support is now resistance. This is EXTREMELY bearish.

The situation “beneath the hood” is even uglier. When you remove the impact of Big Tech (the S&P 500 is heavily weighted towards Big Tech with Nvidia (NVDA) alone accounting for 10% of the index’s weight), the equal weighted S&P 500 (each company receives 1/500^th of the index’s weighting) has taken out critical support and is now trading at levels not seen since July.

Put simply, things are getting REALLY ugly in the markets.

In this context, the #1 question for investors is whether the bull market is about to end and it’s time to “sell the farm” … or if this is another opportunity to “buy the dip”.

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