The gap-open this morning following the positive headlines about a trade deal with China this weekend is being sold. The indices are still solidly green and breadth is stellar at around 5250 gainers to 1600 decliners.
Of course the bears will use the fact that there is flipping into the early strength to develop their narrative that no one really believes Trump and nothing significant took place on trade at the G-20 meeting.
Maybe, but it is premature to draw that conclusion at this time. What we have this morning is some routine flipping into strength. If you are a prudent trader that did some buying last week, then you take some gains into the big open this morning. Not because you are bearish and think the market is going straight back down, but because that is what traders do.
After the routine flipping into the strength the next step is to watch for some support to develop and then make some new buys. There is nothing negative about some selling into an overbought market on good news. However, if support levels don't hold then there will be some reason to be concerned.
My overall market view right now is to maintain a bullish bias but look for some pullbacks to support. I believe that the more dovish Fed and the incremental positives on trade will keep a bid under this market.
This morning I flipped a number of things into strength and now I'm waiting for some signs of support so that I can put some cash back to work. One name in particular that I'm watching is Aimmune Therapeutics (AIMT) which has been trying to find some support in the $23 area. Analysts at Cantor Fitzgerald assumed coverage with an "Overweight" rating this morning and a price target of $64.