The Only Thing Missing From This Bull Market

President Trump announced a massive trade deal with Japan that is helping to push stocks higher as investors await earnings reports from Alphabet GOOGL and Tesla TSLA Wednesday afternoon.

The deal with Japan sets tariffs at 15%, creates a $550 billion investment fund, and opens the Japanese markets to aircraft sales and agriculture purchases. The Japanese market is trading sharply higher on the news, and the economic critics in the U.S. are having a hard time finding negatives to shout about. 

The ability to hammer out this deal raises hopes that a European Union deal is coming soon. It also helps set the framework for dealing with the automotive industry in Germany.

The primary focus of the Trump administration is to announce a series of these trade deals before the August 1 deadline for unilateral tariffs. There is obvious progress, and it is causing more pressure on the anticipatory bears who keep looking for negative development to suddenly emerge.

The big earnings tonight from Alphabet and Tesla will provide insight into the mood of investors. With the indexes and many stocks technically extended, conditions are good for a sell-the-news reaction. 

Will there be willing buyers on good reports? Will there be profit-taking into strength? Are there dip buyers lurking to jump in on pullbacks?

The market has been so strong for so long that there is tremendous FOMO at work, which creates formidable support. The news flow is very positive, and the only thing that is missing is good entry points for new buys.

Trying to call a market top has been a very painful exercise for many pundits and strategists, and it looks like it will continue to be a costly enterprise.

At the time of publication, Rev Shark had no positions in any securities mentioned.