For a few months now there have been only two news events that have mattered.
The first is an agreement on trade with China and the second is the Federal Reserve's attitude toward potential interest rate hikes. Both issues have provided a steady supply of fuel for the market. The bears and pessimists complain that the market keeps rallying on the same news and that it should be discounted to a great degree by now, but the market has not been listening.
The market will hear from Fed Chairman Jerome Powell again here on Wednesday morning as he testifies in front of the House Financial Services Committee. However, after Powell's appearance Tuesday in front of the Senate, it is clear that he doesn't have much new to add to current market view of the Fed.
The market is content that interest rate hikes are on hold, inflation is low and economic growth is in good shape. That is ideal for further market upside, but the Fed isn't the driving force it was when the shift in attitude first took place.
The China trade issue is now on hold as the market awaits the next step in the negotiations. Optimism is still very high that a deal eventually will occur, but there isn't going to be any immediate news and that may give the bears an opening for some selling pressure
The news here on Wednesday morning is dominated by the Trump-Kim summit in Vietnam, but the cable news will be dominated by sensationalism over President Trump's former attorney, Michael Cohen, who is appearing before Congress. He is expected to make several claims that have Trump critics excited, but the market hasn't cared much about these partisan political issues. We'll see if there is any reaction as the breathless headlines roll out.
The issue that market players need to consider is whether there will be some good excuse for the bears to embrace that finally will provide some significant selling pressure. Technical conditions are good for some sort of pullback, but a "sell the news" reaction did not develop on the China news and Jay Powell did nothing to upset the apple cart with his congressional appearance, so the bears still are seeking a catalyst.
The key here is to stay focused on the price action. As I've often written, it isn't the news that drives the market but the market action that drives the news. The headline writers have plenty of good reasons ready to explain some downside, but they need some downside in order to put them to work.
The bears have made a couple weak tries to pressure this market lately and they are trying again, but there has been good support and not too much worry. I continue to like the action in individual stocks, but some downside actually would be a positive as far as creating new setups and opportunities.
Stay vigilant, manage positions closely but don't go full bear just because the pundits are predicting disaster once again.