Market participants quietly celebrated the news that China and the U.S. have agreed on a phase-one trade deal. The deal has yet to be signed and many of the details are not very clear but the good news is that we will not have to hear about this issue for a few weeks.
The deal was announced in a very confusing and chaotic manner which undermined some of the celebration. The indices traded close to flat for most of the day with breadth slowly slipping and finishing the day in the red with about 3,400 gainers to 4,050.
Bears looking for a "sell the news" reaction were disappointed but so were the bulls expecting a euphoric response to the much anticipated agreement. It was a quiet conclusion to a dramatic issue, although that may not be a bad thing.
While the indices are a little extended and could use some rest, the trend is positive and with just three weeks left in the year there are positive dynamics at work to help hold up stocks such as tax planning and performance anxiety.
One of the big positives of having the trade news out of the way is that traders will not be held hostage by the headlines and will have better opportunities to do some stock-picking. There should be some good window-dressing opportunities and I'm be looking for potential January-effect plays.
This market has had a lot of good news lately. In addition to a trade deal, there is a dovish Fed, no sign of a recession, an election in the U.K. that should resolve the Brexit problem, complete indifference to the partisan politics in Washington and a market hitting all-time highs. It is such a positive brew that has to make you at least a little nervous.
Finish up that holiday shopping and I'll see you on Monday.