I don't care what anyone tells you--while plenty were expecting a Nonfarm Payroll report over 200,000, but almost no one predicted the markets would react this way.
All week the market has struggled as generally positive economic news has been met with taper fears, with lower prices and higher bond yields.
Now, all of a sudden we get the Mother of All Good News and stocks stage a rally, with little or no reaction in the bond market?
The market today is saying: Don't sell on tapering. Huh?
Does this mean that tapering is less of an issue?
This is the crucial question for the market right now. Taper is the biggest negative the bears have been pointing to.
Are "taper worries" a 2013 issue and not the 2014 issue that we all expected?
That's a problem for active traders, because many aren't positioned for this. Many are positioned for tapering to be a headwind.
Is this theory wrong? Does it prove the stock market might be strong enough to handle a taper with minimal damage? Alan Ruskin at Deutsche Bank voiced this opinion this morning and said the positive market reaction increased the chances the Federal Reserve might begin tapering in December.
I'm not so sure. Remember, this happened last month...we got a better-than-expected jobs report, and the market rallied. It proved to be something of a head-fake for the market. It rallied, but for a few days, and then stalled out.
Second, the bond market HAS responded to better economic news. Bond yields have been running up since late October, moving from roughly 2.50 percent to 2.87 percent. So the bond market has already priced in some moves. I've even heard some try to argue that at current levels one can make the case they are positioned for a January taper to start.
If that's the case, that is a pretty mild reaction.
There are two issues: The timing and aggressiveness of the Fed taper, and how Janet Yellen will cut the Gordian Knot linking tapering to tightening.
First, a lot of traders are arguing that two months of job growth over 200,000 is still not enough to convincingly start rolling back bond buying and that the Fed will still not likely begin paring back before March. That's the position of Jan Hatzius at Goldman Sachs and Michael Gapen at Barclays.
Others, including Drew Matus at UBS, anticipate taper will begin in January.
But perhaps a more important issue to settle is not WHEN the Fed will begin tapering, but how aggressive it will be once tapering begins.
Some believe that while a 200,000 figure is strong, it's not too strong, and that when the Fed begins tapering, it will be a very gentle process. That's the position of Steven Englander at Citi.
Second, there is a growing belief that Janet Yellen will attempt to enforce the concept "tapering is not tightening" by doing something dramatic, like changing the 6.5 percent unemployment threshold the Fed has previously indicated would be the point they would begin increasing interest rates.
—By CNBC's Bob Pisani