It is that time again for the bottoming of the 20-25 day cycle in the S&P 500 (SPX). The problem is that since the February 5 pivot low at 1044.50, the entire cycle has been on the upside so far. Usually, when a cycle is so lopsided to the upside, the final 1-3 sessions ahead of an anticipated low ushers in some intense weakness. Today is the 18th session off of the February 5 low. If the current cycle proves to be 21 days in duration, then next Monday we should expect a low. If this cycle is 25 days long (like the January-February cycle), then the low could be Friday March 12. With this Friday's Employment Report certain to create intense market volatility, and because it coincides with the "window" for a forthcoming cycle low, Mr. Market could be setting up for a serious bout of weakness starting this Friday into early next week.

Alternatively, if the SPX moves straight up into and in reaction to Friday's report, the technical work is warning me to sell into the news ahead of the anticipated cycle low. With the SPX up 6% since the last Employment Report (February 5), the potential for a nasty correction would appear to be gaining steam. Purely from a price perspective, a decline in the SPX that breaks 1115.70 will be my first strong signal that the "downside" of the near-term cycle is in progress.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.