The first law of physics is that an object will remain at rest or in a uniform state of motion unless that state is changed by an external force. To a great degree, that same principle applies to momentum in the stock market. Momentum will continue until some outside force in the form of news or emotions exerts force on the price action.

Some folks may scoff at the application of physics to the stock market, but the principle is fundamental to most everything in the world. Behavior and movement doesn't change unless there is some outside force of sufficient magnitude to change it.

I've often written a simplistic variation of this idea, which is that trends tend to last longer and go further than most people think is reasonable. Trying to apply "reasonableness" to the stock market doesn't work well, because it is not a sufficient outside force to kill momentum.

When we contemplate the current market action, what is a force that may eventually come into play and change the market direction?

The most obvious answer is an actual "phase one" trade deal between Washington and Beijing. The market has gained momentum in continuous headlines and stories about how a trade deal is progressing and will eventually be accomplished. Those stores keep the momentum going and there is no other force to stop it.

Once an actual trade deal is completed that catalyst will disappear. Eventually, there will be talk about a "phase 2" deal to serve the same purpose, but that time frame is long enough that it won't have an immediate impact.

An actual trade deal now would be such an obvious "sell the news" event that we have to wonder if it will work. We won't know until the news finally occurs how it will play out, but it is the outside force that can change the trajectory of the market action.

As I write, the indexes continue to sail along to the upside and hit new highs. Breadth is running 4,200 gainers to 3,100 decliners, and there are around 600 new 12-month highs. The first law of physics appears to be working well for the bulls, but at some point that outside force will hit and that will require us to react.