The logical action this morning would have been market weakness after the contentious G-7 meeting. It seems like a pretty straightforward, cause and effect relationship, however that isn't the way this market operates.
That sort of 'sell the bad news' reaction is first level thinking and when computer algorithms dominate trading it doesn't work that well. Trading these days is dominated by second and third level of thinking. The question that sophisticated traders ask is 'how do we take advantage of simplistic thought'.
That second level thinking is now so dominate that 'dip buying' is nearly automatic. The smart move is to buy the bad news because that is what the smart money traders keep doing. When a dynamic works then you keep doing it.
The bears keep making the same mistake when it comes to Trump. They have very solid arguments for why his action are market negatives, but they overlook the second and third level thinking that creates a different reaction. This market doesn't care about the trade issue, not because it is meaningless, but because the way to make money is to focus on the price action instead.
The indices are showing only minor gains this morning but breadth is quite good with about 4200 gainers to 2550 decliners. New highs are down a bit to around 323 but ther is still plenty of momentum to be found.
My Stock of the Week is Sogou (SOGO) which is the second largest search engine in China after Baidu (BIDU) . Some of the recent China IPOs have been the big momentum leaders lately. IQIYI (IQ) , the Netflix (NFLX) of China has been on a rampage.
I am not finding many new buys right now and that narrowness concerns me a little, but until selling bad news starts to work there isn't any reason to be too bearish.