Tomorrow the market will get what it was waiting for all day today – the monthly employment report.

Guessing the direction of the market’s reaction is particularly difficult right now because the markets have basically gone sideways for the last 7 days. The IWM has been a more volatile sideways, but the net result has been the same.

When markets spend even just a few days consolidating it can lead to a new trend on a breakout. So 7 days of consolidation, and a big economic report, is a good combination to anticipate some nice movement tomorrow which should spill over into next week. All the more reason for the market to have simply rested today.

There were, however, a few “tea leaves” to read in today market action to anticipate the market’s mood going into tomorrow.

I don’t want to over think the market’s mood here, but an interesting observation is that the SMH which has been the market’s leader took the hardest hit today amongst the Modern Family. True to its trend it did bounce back, but it was the only one to travel substantially below yesterday’s low.

On the other hand one of the weakest family members (XRT) was by far the strongest today, rallying 2% and closing over the prior day’s high.

This action of taking profits in the market leader, and buying the laggard, suggest a defensive mood going into the employment report.

Don’t overthink it, but if the market get off to a good start tomorrow you may want to look at XRT and other areas of the market that have pulled back before you assume the same old leaders will continue to be the best place to be.

If the market breaks to the downside, be careful. As said yesterday, this market is not in a good mood.

S&P 500 (SPY) Key support to hold is 233.90. Look for resistance at 236.50 and 237.40

Russell 2000 (IWM) Quite bearish below134, may find support at 133. Big Resistance at 136.50

Dow (DIA) Key level to hold is 205. Resistance at 207.25