Yesterday markets tumbled as Mario Draghi, president of the ECB, left rates unchanged and did not announce the immediate beginning of a bond buying program. The market was looking for immediate action after Draghi, in a speech in London, said he would do “whatever is necessary” to save the Euro. Instead of action, Draghi outlined what the ECB’s future policies could be – the bank can buy shorter dated debt from struggling countries like Spain and Italy, but will only do so upon those countries request. Draghi also said “It’s pointless to bet against the Euro. It’s pointless to short the Euro.” The market however, disagrees, with the Euro down against the dollar. Curiously, the S&P 500 was down nearly 1% yet the VIX closed down 7%, suggesting traders did not feel the need to hedge their portfolios by buying puts. This could mean that the market will be headed up from yesterday’s lows.

This morning S&P 500 futures are up over 1% on a better than expected jobs report. Non-farm payrolls for July were reported as a gain of 163,000 versus 100,000 expected and 64,000 last month. The unemployment rate slightly increased to 8.3% from 8.2% last month. This data will be closely monitored by the Federal Reserve when deciding what kind of stimulus, if any, will be provided to the economy. In the near them we expect to see the market rally off of this number, with 1385 the critical resistance point for the S&P 500 September futures. A breakout through here would signal that the market has left its summer trading range and is poised for a run higher.