After a very volatile overnight session, there is a little buying interest this morning but it is mild, tentative, and uncertain. President Trump is scheduled to hold a press conference after the close which is likely to be positive and minimize the dangers of the spread of Covid-19 in the U.S. but the big danger right now is any news about expansion of the virus in the U.S.. It won't take much to tip some folks into a panic response.
However, since the DJIA just suffered the biggest two-day point loss in its history, it is natural that there are some traders looking for bounce action at this point. It is a Pavlovian response that has worked more often than not and is very hard to resist for traders that have navigated the sudden drop with some success.
While a bounce is very likely to occur soon, the much more difficult issue is how quickly the market can recover from this corrective action. This is different than what happened in late 2018 when the market bottomed on Christmas Eve when Mnuchin went to work propping up the market with monetary policy.
Covid-19 is an issue that isn't going to be solved in one day and it is not going to be very clear for a while. The market will overcome it but it is going to be a much bumpier ride than the unwinding of short volatility and other central bank issues.
I covered the last of my index shorts this morning and am making some very small buys. One group of interest on my list is Asian gaming plays Sea Ltd (SE) and Bilibili (BILI) which should benefit from bored individuals stuck at home due to containment.
One name that I like longer-term that I added to today is Personalis (PSNL) . This is a very thin, small-cap which gets hurt badly in a market like we've had lately. Small caps with limited liquidity are dumped into weakness and there is no appreciation of their individual merit. In a poor market they can go much lower because value players are not very quick to jump in when there is a downtrend. I added a little and will look to build it further as market conditions develop.