A number of positive comments in the Chinese media about a potential deal have lulled the market into complacency this morning. Ironically it has been the U.S. media with the negative stories while the Chinese press has been more upbeat. It is unclear what that means but it is likely that President Trump would tell 'China wants a deal'.
The indices are slightly negative and breadth is running about 3100 gainers to 3400 decliners. New highs and new lows are exactly even at 61.
Quite often flat action of this sort is favorable for stock pickers. The strong stocks stand out more and traders gravitate toward them which creates momentum. Three names on my screen this morning are Ping Identity Holding (PING) , Datadog (DDOG) and DocuSign (DOCU) .
Overall market action is very sedate but there are some pockets of activity for traders with short-term time frames. There still is no compelling reason to bet on a major market correction at this time. I'll be watching to see if there are some lower lows and if yesterday's lows are tested that will be a warning sign, but the tone of the action right now is not particularly negative.
This is a good environment for trading individual stocks and not worrying too much about market direction. Stay vigilant but don't be overly anticipatory.
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Traders continue to hunt for good action as the gap narrows between extended big-cap stocks and beat-down smaller names.
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