The S&P 500 had its worst start to a February in 81 years.

With earnings now halfway over, this Friday's release of jobs data will be crucial in determining the market's next move. As well, it could have repercussions elsewhere; strong employment numbers may determine the pace which the Federal Reserve Bank continues to taper its monetary stimulus.

In other words, everyone's holding their breaths until Friday at 8:30 am Easter Time, when US Bureau of Labor Statistics releases the Labor Department's figures.

(Read: US jobless line shortens as productivity jumps; trade gap widens)

Chad Morganlander, portfolio manager at Washington Crossing Advisors, says the Fed's tapering will continue. And, that may have some short-term consequences.

"Unfortunately, the financial system has been trading on that tsunami of liquidity courtesy of the Federal Reserve," says Morganlander. "The markets are trading on flow of the Fed's balance sheet, not the size of the balance sheet."

Prior to the Fed's monetary stimulus at the start of financial crisis in 2008, the Fed held around $900 billion assets. Today the Fed's assets are $4.1 trillion and rising, but at a tapering pace. The S&P 500 gained 159% from its March 2009 lows.

While Morganlander sees the potential of an addition correction of between 5% and 10%, he sees the year ending on a high note.

"You're going to get a positive year with GDP growth of roughly around 3% and earnings on the S&P of about $115 per share," says Morganlander, which would make the market trade at a rate of 15 times forward earnings. "So, what do we get? We get a market correction, a garden variety one. We don't think that there's going to be really a massively disorderly type of malfunction within the credit system."

(See: CNBC's Economic news)

Jonathan Krinsky, Chief Market Technician at MKM Partners, believes the drop is near its end.
"I think we're pretty close to the end of this pullback," says Krinsky. From its October lows to its record close in January of 1,848, the S&P 500 gained 193 points. Krinsky notes that 1,750 is a 50% retracement of that rally, a technically significant point.

Krinsky says the technical level investors should also watch with the S&P 500 is the 200-day moving average, currently at 1,708.

"Perhaps we get another flush down to the 200-day moving average," says Krinsky. "But, the S&P has been above its 200-day for well over a year. It's the sixth-longest streak going back to 1980. So, are we due to test it? Perhaps, but we think you want to be a buyer on any weakness even if you get pullback into the 200-day."

To see the full discussion on the S&P 500 with Morganlander on the fundamentals and Krisnky on the technicals, watch the video above.

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