The stock indexes were crushed on Thursday as European Central Bank head Mario Draghi apparently did not bring enough stimulus to the table in Europe and the probability of an interest rate increase by Janet Yellen on December 16 increased substantially. The euro soared higher as the U.S. dollar was crushed. This sets the stage for an interest rate increase into a growth-slowing environment and a possible recession on the horizon in the U.S. The stock market did not take that news very kindly on Thursday.

The DJIA closed off the lows of the day but still finished down 252 points to close at 17,478. The S&P 500 lost nearly 30 points to finish at 2,050. The Nasdaq lost 86 points to finish at 5,037 and the Russell 2000 was down by 21 points to close at 1,170.

Now the backdrop is set for the all-important jobs number Friday morning. A good jobs number virtually guarantees a rate increase by the Fed. It appears that we got a glimpse of what the stock market is going to look like with an interest rate increase. The probability increases that we will see more than one interest rate increase over the next several Fed meetings. Traders and investors should prepare for at least one or two more rate increases after the first increase. Not that it needs to be pointed out, but increasing rates in a deflationary, growth-slowing economy is a recipe for disaster.

In addition, the S&P 500 Trust Series ETF(SPY) - Get Report volume traded over 160 million shares on Thursday. This was the highest volume day since 10/22/2015.

The PowerShares DB US Dollar Index Bullish Fund(UUP) - Get Report was overbought on the weekly time frame, as we pointed out a few weeks ago. Below is the latest chart of what it looks like now at the present time.

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Finally, the ProShares Short VIX Short-Term Futures ETF(SVXY) - Get Report is set up for a move higher for a trade on Friday morning. I intend to start a long position for a trade.     

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.