Quick comments on this morning's job report:
Finally the Fed will have a perfect excuse to cut the interest rates. This morning's much worse than expected non-farm payroll report pretty much guarantees at least one fed rate cut(presumably more than one in my opinion). In addition, the Fed may well cut by 50bps instead of 25bps previously expected. So overall, it may cause short-term hurt for bulls, but I regard it as a positive news heading into the Fed's meeting. 

Afternoon comments:
The market reacted negatively to this morning's surprising job report. Volatility shot up with all three major indexes dropping around 1.5%. Volume is heavier than usual Fridays, indicating fewer investors want to hold positions over the weekend. Gold prices continues to climb higher and now is above $700 mark while US dollar is sharply lower against major currencies, indicating FX traders have already expected rate cuts. With 6 more trading days remaining before the Fed's next meeting, continuous volatility should be expected.

The market held a wait-and-see attitude through most of the day. Tomorrow will bring this week's most important economic news - Non-farm payrolls. Although the ADP number indicated weaker numbers tomorrow, it might not be a bad thing for bulls at all if this is indeed the case. Credit market continues to show nervousness evidenced by 11th consecutive closing high for LIBOR. The important commercial paper market also dropped for the fourth week in a row. As a result, the influential financial sector remains weak. Oil prices retreated from its peak but remained high amid renewed worries about terrorist attacks in Nigeria.  Recently, the tech sector outperformed the broad market. And the Nasdaq 100 are doing particularly well. It may become take the leadership role if the broad market has a year-end rally during the fourth quarter.

Bears are back to work on Wall Street and all major indexes had a drop of around 1% today. The credit market is still not out of the woods yet as the LIBOR has risen to levels not seen since 2001. On the other hand, the Fed's Beige book offers little indication that it's ready to cut rates in the next Fed meeting. Most economic news this morning were negative, which might not be a bad thing as it did provide more reasons for the Fed to cut. But in the end, it's still the Fed that will determine whether to cut the interest rates.

All three major indexes moved higher following strong leadership from Tech and Financials. September is historically a very volatile month for stocks but interestingly, the first trading day right after the labour day has seen more up days than down days and today is no exception. The volume is relatively strong compared to last week but not impressive. Oil prices continue to move higher and now the front month contract is back above $75. On the surface, it looks like the worst might have been over since Aug 17th, at least for stocks. But I remain very cautious as the credit spread between high yield bond and T-bonds doesn't narrow at all during the past 2 weeks, indicating continuous tight credit market conditions. And the Fed is facing a very tricky job when they meet again at Sep 18th. How will this play out? I guess we have to wait and see at this point.