Jobless claims need to come in well below the estimated 386k. They need to continue the down trend, or at the very least chill at the low side.
The lower jobless claims should translate into a pretty good Employment Situation number come next week or next month.
If the jobless claims do not approach 360k or lower, protection would be prudent next week, the Thursday prior to the Employment number on Aug 3rd.
The market is still at a very low multiple, with a lot of key stocks trading at very low multiples, already projecting a bad economic out come. But with jobs as a leading indicator, if US jobs improve, multiples will expand.
Of course, if jobs improve, the bears will look to Europe or China or the "fiscal cliff". But these issues are policy issues, that can be remedied with political action. The three issues can be squashed if there is EU Fiscal Union (seemingly close), Chinese stimulus (HSBC PMI indicates previous action is working) and US politicians stop acting like douches (that's a tough one).