Market players wasted little time in buying the weak open. The gap down open was immediately bought, and that sucked in more buyers and drove the S&P 500 into positive territory. Breadth is running about 3,800 gainers to 3,100 decliners as individual stock-picking continues to dominate the action.
There is no big secret what is driving this action. The bears simply can't press their pessimistic narrative as long as there is the potential for something positive on China trade. Many market players think it is ridiculous to believe that a good deal will emerge, but we have seen too many rallies on very general news to fight it.
I've been weeding out some positions this morning as my long exposure has grown recently due to better stock-picking. I don't see any reason to try to short the indices at this point, but some profit-taking in individual positions that have been running seems like a prudent move.
My goal is to keep accounts as close to highs as possible, which necessitates taking some profits into strength or on minor pullbacks. The stock may have done nothing wrong technically, but money management may demand some action regardless.
The market is at an interesting juncture with the very strong underlying bid due to the potential for good China news. But if that bid disappears, it is going to be tough to find another clear positive catalyst like that. The potential for a "sell the news" response will be very high. For now, the more likely course of events are some more spikes to the upside on incremental positive reports.