Down 3 Days in a Row; Jobs Report Tomorrow

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The ES has now sold off 100 points from its December 4841.75 contract high, while the NQ is off more than 675 points from its recent high. 

Is that enough? It could be in the near term, but I don't think the low is in for January. As for the Fed, I am not surprised at all. 

There was too much irrational exuberance between the markets going up and the big bets on interest rates going down. For a quick refresh, last month the Fed said it expects about 75 bps of rate cuts in 2024. However, the market is pricing in about 150 bps worth of cuts. 

There is just too much time in the year to throw your hat in one direction. Today's economic calendar includes the ADP number, initial jobless claims, and the S&P MPI services number and tomorrow is the week one FRYdays options expiration and the December Jobs report. 

That all said, the S&P is headed for its first down week in 10 weeks — so keep that in mind when it comes to the trend.