As expected, news flow about a potential deal with China dominated the market movement Monday.
Things started off weak after China indicated that did not expect an all-encompassing deal, but the action improved after White House economic adviser Larry Kudlow made some optimistic comments. Then things ramped even higher when Kudlow's Chinese counterpart stated that a deal would be reached on points that were already agreed upon. But after a few minutes of contemplation, market players came to realize that maybe that means that there isn't going to be any real progress, and the indexes closed near the lows of the day.
The movement was all headline-driven and fundamentals and technical patterns didn't matter much at all. Unfortunately, it is likely to continue for the remainder of the week, but expectations for some real progress on trade have come down and that may help the market to price in an underwhelming trade deal.
Breadth went from two to one negative to slightly positive and then to 3,000 gainers to 4,400 losers at the close. That is representative of the random movement: Once again there is very little as far as leadership or themes and it is extremely tough to be a stock picker unless you are working in time frames of minutes to hours.
The only meaningful thing about the action Monday is that it became pretty clear that there is not going to be some big, glorious trade deal with China at the end of the week. There is likely to be something, but whether it will be enough to keep a bid under the market is the issue.
More trade headlines are on the way, so be ready for random movement.
Have a good evening. I'll see you Tuesday.