While the market action was slow and uninteresting Thursday, that is more a positive than a negative. It is a product of the natural ebb and flow of emotions and helps to pave the way for more upside.
It is always possible that the selling accelerates and a downtrend will form but there is nothing right now that suggests that will happen.
It is being reported by Fox Business that White House "economic advisors," which would likely be Larry Kudlow and Steve Mnuchin, believe the DJIA could pop 2000 points on a significant U.S.-China deal. However, Mnuchin is also saying he does not expect a meeting between Trump and Xi this month.
Although that may be a wildly optimistic prediction it does help to highlight the danger of being too bearish in the short term. The indices are still reacting to every meaningless headline dealing with trade and there is no question that that the computer algorithms will be ready to go to work when there is some significant news.
A big move on trade news may turn out to be the mother of all "sell the news" opportunities. However, you can't position yourself for that reaction at this point. You have to wait for the news and a reaction before you can even think about a "sell the news" trade.
I constantly hear jokes and pessimism about the potential of a meaningful trade deal with China -- that attitude misses the point. The great likelihood is that the market will jump on headlines and even if you think it's ridiculous that isn't going to help you if you are on the wrong side of the action.
For now, the best approach to this market is to make sure you aren't caught being too negative as this price action continues. There is nothing wrong with this market technically at the moment and it's a good idea to respect that fact.
Have a good evening. I'll see you Friday.