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What's next for stocks after disappointing jobs report

So much for bad news is good news.

S&P futures dropped 20 points, and bond yields slipped as nonfarm payrolls came in at 142,000, well short of expectations of 200,000. But the real killer was notable downward revisions in July and August.

Read More Jobs report signals Fed on hold until 2016

Not to mention, hourly earnings were flat.

So what do traders do? They will likely do what they have been doing for the past six weeks or so: nothing. After lowering exposure dramatically, most traders have exhibited no interest at all in increasing exposures, even though the S&P 500 is down about 13 percent from its high on May 21.

My friend Jeff Saut at Raymond James highlighted exactly the dilemma investors are facing in October: "The portfolio managers basically wanted to be 'flat' because if they make a 'big bet' right here and they are wrong, not only do they have performance risk, but also bonus risk and ultimately job risk at year end."

This has led to many days where I have complained of a lack of bids, days during which the market sees normal volume, but stocks drift lower because there is not enough buying interest to sustain even normal selling pressure.

Read MoreDow falls triple digits on jobs miss; financials down 2.5%

A market where buyers are on strike has a different "qualitative" feel than a market in which there is a sellers' panic, but regardless. The old trader saying is right: You can go broke on low volume.

So this report will only add to the unwillingness to increase exposures.

Remember, one of the arguments for the bulls was that the United States was an island of modest growth in a global economy with relatively flat growth. This may change some of that dynamic.

Bears are already out arguing that the Federal Reserve should not only hold rates steady, but that it may have to begin QE4 if the data doesn't improve.

Read MoreJobs report signals Fed on hold until 2016

That's certainly premature. The consumer is doing well, with strong growth in housing and autos. And consumer confidence has been strong.

As for the idea that the Fed has failed, I tend to believe that the limits of accomodative monetary policy have already been reached. The Fed never claimed that accommodative policies would cure all the ills of the world.

I'm in the camp that the Fed missed its chance to raise several months ago.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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