Buying SPX in case of weak US labor market data

The first US labor market report of the year is expected to be released today. The report will summarize the December results. It should be noted that over the past month investors and traders have come to the consensus that the Fed will slow down the pace of monetary policy easing in 2025. This fact is supporting the US dollar and hindering the growth of stock market.

Labor market turning out more tight than expected will signal the persistent inflationary pressure, which could give the US regulator further reason to maintain the current interest rate level of 4.50% for a longer period.

The change in US nonfarm payroll in December is expected to be 164,000, decreasing from 227,000 in November. In other words, the labor market is predicted to cool down. If the forecast is met or the results are lower than expected, the S&P 500 Index will rise towards the nearest resistance level at 6000. 

The unemployment rate above estimations of 4.2% will significantly strengthen the S&P 500 buy signal. A decline in average hourly wage can also play its part, indicating the decrease in both consumer demand and inflation rate. 

The overall recommendation is to buy S&P 500 provided that the change in US nonfarm payrolls for December is not higher than 160,000.

Profits should be taken at the level of 6000. A Stop loss could be set at the level of 5870.

The volume of the opened position should be set in such a way that the value of a possible loss, fixed with the help of a protective Stop loss order, is no more than 1% of your deposit funds.