Posted 9:30 AM ET – The market is addicted to good news and the well is running dry. The S&P 500 is above the major moving averages and the next obstacle is horizontal resistance at SPY $281. Trading volume has been fairly light and most of the moves have come overnight.

Today the FOMC minutes will be released. During the last meeting the Fed turned decidedly dovish. In yesterday’s comments I mentioned that some officials only see one rate hike this year (down from two). Traders will try to determine the pace of balance sheet reduction. Good news is priced in and I believe the reaction will be muted.

Tomorrow flash PMI’s will be released and we will be able to gauge activity in Europe. Recent data points suggest a substantial decline in growth.

Domestic economic strength is expected and last week’s retail sales decline (-1.3%) came as a surprise. Housing starts, the Philly Fed and durable goods orders will be posted tomorrow. Any soft patch could spark selling.

Brexit is only 40 days away and a hard exit is very possible. Theresa May is wedged between her Parliament and the EU. Neither side will budge. Companies are already preparing for a nasty exit.

Trade talks with China seem to be progressing. Trump has suggested he will postpone new tariffs while negotiations continue. Meetings need to be scheduled immediately and the market expects steady progress. A positive tone is expected and any change will spark selling.

I believe that Trump will threaten to impose auto tariffs on European cars. No progress has been made on that front.

The market is addicted to good news and the gas tank is almost empty. The global economic slowdown will start to impact the US in the next few months. This is why the Fed took its foot off of the brake. If the releases tomorrow are soft the market will hit stiff resistance. Swing traders should be in cash. We will wait for the technical breakdown at SPY $274 before we re-enter a short position.

Day traders should favor the long side since we are above the 200-day moving average. Focus on stocks with relative strength. The market won’t provide a headwind or a tailwind. That means the stock will have to do it all on its own. Use passive targets. The action will be light ahead of the FOMC minutes. If the first hour range is breached, follow that direction.

The market has made a nice recovery and resistance will build with each new economic release. A trade deal with China will keep economic activity from falling off a cliff, but it won’t stop the trend.