I’m hoping for some clarity this week on the market trend after Friday’s wild day.

Friday’s intraday moves summed up the uncertainty about the direction of this market.

After the huge surprise on the September jobs number, stocks fell immediately out of the gate as investors decided the good economic news (more people working) was bad financial market news since it increased odds that the Federal Reserve would raise interest rates at least one more time in 2023. At 10:08 a.m. New York time the Standard & Poor’s 500 had slid to 4220

But then traders rethought the story and the market odds. A strong jobs market would be good news for company profits and lowered the odds of a recession (if anyone is still worried about that). And, looking at the technicals, stocks seemed, maybe, momentarily, oversold so the reward/risk scenarios said it would be worth a walk on the long side. Stocks rallied for most of the rest of the day, hitting a high of 4323 at 2:45 before moving back to a close at 4308.50.

Which raises the question “Where do we go on Monday?”

Notice a couple of important points about Friday’s action.

The low at 4220 is very close to the 4200 level that everyone is watching right. The consensus among technical analysts is that a break below 4200 would open the market to the risk of a drop to the March lows near 3900.

So you could say, and I would, that on Friday the market tested the downside and said, Well, not yet.

The high of the day at 4323 is close to but still below the 4350 level of the June lows that technicians are watching to see if the market is ready for another leg to the upside. The consensus here is that the market needs to hold above that June low of 4350 in order to signal another leg to the upside.

Friday’s action then summed up the market’s uncertainty now. Not quite ready to throw in the towel and break below 4200. Not quite ready to charge ahead and hold above 4350.

This week I’d watch oil prices–they will be an important factor in setting market sentiment. A climb in oil–on the possibility that the current fighting in the Middle East might pull in Iran–would feed into fears of higher inflation and the possibility that higher energy prices would slow the economy.

I’d watch the yield on the 10-year Treasury. It’s important to note that despite the relatively strong day for stocks on Friday–the S&P 500 closed up 1.18%–the yield on the benchmark Treasury kept on climbing with an increase to 4.80% or a gain of 8 basis points on the day.

And I’d watch sentiment on the CME FedWatch tool. Odds of a 25 basis-point increase at the November 1 Fed meeting rose to 27.1% on Friday, up from odds of 18.3% a week ago. Odds of a 25 basis point increase at the December 13 meeting were 36.7%. (Please note that the December 13 odds are for a total 25 basis point increase at the November 1 and December 13 meetings and not for two increases.)

I still think the trend here is likely to point lower until we get all this “news” overhead out of the way–Congress and a government shutdown in November, the Fed, bond yields, and the continued retreat in the euro toward parity with the dollar to name a few. This is an uncertain market with a high sensitivity to events right now.