The logic of the market can be quite puzzling at times. If it was simple the market would go up on 'good' news and go down on 'bad' news. That happens sometimes like when the market fell sharply on 'bad' news about China trade but other times the market's reaction to news flow is quite confounding.
What makes it complicated is that many market players don't care about 'value'. They don't care if some piece of news is going to create positive economic activity or not. What they care about is staying one step ahead of other traders. They are looking to trade other traders. Most of the computer algorithms that drive the market are geared toward that task. There aren't attempts to find the correct price. There are attempts to catch traders that are vulnerable to moves in different directions.
That is what explains the action today and yesterday. There isn't a sudden burst of great news driving up stocks. There were some Trump tweets that might be ignored in another context but today they were the foil for trading other traders and the best way to do that is a move to the upside when the majority are looking for a move to the downside.
The fact that downside action is very reasonable and logical in view of the recent news and technical data is what makes the market so susceptible to a move in the opposite direction. Many traders, including me, were not expecting a sharp move higher. I'm not short but I have very high cash levels as I thought that the recent news and chart action suggested more downside.
More downside may come but astute traders have to stay very aware of the strategy that is being employed. This is beyond second level thinking.
Longer term the fundamentals and news flow will matter but it is foolish to think you can time all the twists and turns in the shorter term with a high degree of accuracy. The goal is to track the action and watch for the high odds opportunities. They will look different to different traders and there is a strong likelihood that the market action will not appear to be very logical if all you do is consider whether news is 'good' or 'bad'.
I'm doing very little as I wait for a better edge. I'm not willing to buy this strength but I'm in no rush to short it either.