Where do we head from here?

Despite headlines that the U.S. Trade Representative's office proposed to increase the value of European-made goods targeted for potential import tariffs by $4 billion to $25 billion, markets barely seemed to react.

Has the market gained too much confidence on the potential of a trade deal with China or are we seeing the market impact of a low-volume trading week?

Over on Real Money, TheStreet founder and Action Alerts PLUS portfolio manager Jim Cramer said that while Wall Street is quick to assume that things have gotten too bullish, it's important to ask what sectors of the market are overvalued. Other than an expensive subset of tech, not many, Cramer wrote.

 So what has Cramer so confident in this market?

"I think that there's a belief that the president's gonna flip again, that it's just going to be, well, wait a second. People are gonna say I'm too soft line. So the inconsistencies are getting to people. I think it's wrong. I think there's going to be a big buy of something by the Chinese. Is it a win? I think that the win will be couched as, hey, we got away with all these big tariffs already. Let's get some more time. Let's see what's going to happen. But I think the idea that it's, that it's insignificant is a big mistake," explained Cramer. 

Related. Jim Cramer: I Defy You to Show Me That Bullish Investors Dominate

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