The employment report for December is worse than expected. The unemployment rate rose to 5% (forecast: 4.8%) and payrolls rose by 18,000 (forecast: 70,000), which increases the likelihood of a fed funds rate cut later this month. Stock index futures were indicating a positive open just before the report, but sold off violently after the report.

Over the past few days, the markets have become oversold, and now we are likely to see even more extreme short-term oversold conditions on an intraday basis at least. This means that a technical bounce may either arrive later today or sometime next week. The latter is more likely.