As equity investors navigate through September's volatile trade, the prevailing direction of markets needs further information on whether monthly U.S. payrolls are still cooling or if signs of strengthening are cropping up, Bank of America (BofA) said Friday.

Following topsy-turvy sessions this week, Wall Street's major equity averages (SP500) (COMP:IND) (DJI) on Friday were on course for weekly gains. The S&P 500 (SP500) and the Nasdaq Composite (COMP:IND) still have yet to reclaim all-time highs set in July that were lost during a recession scare stemming from a slowdown in the private jobs market.

To "resolve autumn ambiguity," the market needs to see fresh jobs data showing payrolls are either growing at more than 100K or by less, Michael Hartnett, investment strategist at BofA, said in the weekly "Flow Show" report. "Until then, risk rotates rather than rips or retreats," he said.

The October jobs report is scheduled for release on Oct. 4. August nonfarm payrolls rose by 142K vs 160K consensus. The July jobs report that ignited recession fears initially showed slower additions of 114K, but that figure was revised down to 89K in the August report.

Hartnett said bulls and bears are volleying points backing their market views. Bulls point to credit spreads and chip stocks (SOX) and tech names (XLK) defending key technical floors. Bears, meanwhile, say "nothing good happens" when bond yields and bank stocks are falling together, the strategist said.

The Federal Reserve is expected to begin rate cuts next week as policymakers have an eye on cooling in inflation and the labor market.