S&P bouncing along - 200 points drop likely?

Last week was a big up and down and after Fed's Dudley initially down talked a potential rate hike, Friday's job numbers make the rate hike more likely again. Although job creation slowed, the unemployment rate dropped below 5% and average earnings saw a huge rise which lead to a Dollar rally on Friday and the S&P 500 tanked. Markets are eagerly waiting for Yellen's comments next week.

From a technical perspective, the S&P500 showed a precise 50% Fibonacci retracement and immediately started selling off again. 1870 is an important level but given the current situation, a break is likely. The next target is at 1820 to the downside - which is the 0 Fib. The 161 Fib-extension target falls into 1640 which would be a 200 points drop from current levels.