This week was all about waiting for Friday to hear from Janet Yellen. Next week is likely to be similar, waiting around for Friday’s employment numbers.

Our traders were almost all neutral at the start of the week and they were spot on into this morning as we traded unchanged on the week. Now the S&P 500 is down 8 points to 2164, though it feels like the selling is greater today given the range.

The VIX currently is up 6.3 percent to 14.5, the highest since July 8. The VXST, the 9-day Volatility Index, is up almost 6 percent to 13.5. Unless we open higher on Monday it is likely that the VXST will be above the VIX, a signal of short term fear and potential further selling.

The market clearly didn’t like what Yellen had to say. Now we look at potential short positions and where the next level of support happens to be. John pointed out that we had sell signals on Wednesday and Thursday for the ES. He also pointed out the daily squeeze in the VIX.

How much selling we get is now the question.

Carolyn has support levels around the 2160 level and then 2155. That said, she is focused on setting up some shorts

Eric pointed out in the chat room that a moderate pullback here would be a healthy thing for the bull market.

Chris is looking to “short the massive reversal in the /ZB (30-Year Treasury Bond Futures).” He is also looking at how a “crack in our bond market could make Japanese yields rise as well”, and looking to potentially play that with the JGBD a 3X ETF betting on Japanese rates rising.

Tony is looking forward to next Friday and the potential September rate hike. He is “looking for a very difficult corrective type trade with a bearish bias for the next 3-4 weeks” but is not looking for a place to sell this market, but a place to buy it.

Tucker thinks next week will be a lot like this one, with low volatility waiting around for Friday and those employment numbers. “If they are strong, look for a market response similar to today, as that will almost certainly cement rates going up in September.

David had shifted neutral a few weeks ago, not because he expected the chop we actually got, but because “the index had reached a level where we could no longer count on additional upside.” He now expects a multi-week pullback, but isn’t sure if it has already started or if the S&P 500 needs to go higher first.

Who knows what next week will bring. But if it is another snooze-fest until Friday then it will be a good week to sit on the sidelines or trade small until there is some clear conviction.

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This article was written by Simpler Trading's Editor-in-Chief, Chris McKhann

Chris McKhann has been involved professionally with the stock market for more than 15 years and specifically with derivatives for 12 of those. He started as a stock broker, but quickly moved on to options and futures trading. He spent some time as the Derivatives Product Manager for TD Ameritrade. He was the chief analyst and hedging strategist for OptionMonster. He has been an options trading educator and content provider for many years. His writing and analysis has been featured on Reuters, the Wall Street Journal, Forbes, TheStreet, CNBC and internationally. He has also designed and traded option and futures strategies for prop trading firms and hedge funds as well as managed accounts.