There was some excitement among the bears last night as China markets were rocked and futures collapsed on news that Trump was ready to impose tariffs on China. U.S. markets opened down but have bounced straight up off the opening tick. Breadth is still over 5 to 1 negative but most stocks are well off their opening lows and the dip buyers have been rewarded again.
It is interesting to consider that Chinese stocks have been hit substantially harder on this trade news than U.S. stocks. This is obviously seen as a much greater problem for China than the U.S. and that will likely embolden Trump to stay tough. The market would love to see a deal done and the uncertainty resolved but there doesn't seem to be any major panic over longer and tougher negotiations.
Nothing has worked better in this market this year than buying weakness and that is the case again this morning. Some bigger cap names of interest on my radar are Qualcomm (QCOM) , Twitter (TWTR) , Zscaler (ZS) and my Stock of the Week, Etsy (ETSY) .
The important issue to watch now is the index intraday lows. The S&P 500 breached 2900 support for a few minutes and that will be the key technical level. The Nasdaq is well off the early low of 7982.
The longer the indices hold above those support levels now, the more likely that buyers will inch in and put some capital to work. The early fear of a collapse will turn into fear of missing a bounce the longer that stocks hold up.
I've made a few buys of the bigger cap names and will be watching for small caps to improve as the day progresses. This is not looking like a market that is about to embark on a downtrend.