The major indices made new lows for the year this morning after a negative reaction to the announcement of more stimulus by the Federal Reserve but conditions are looking better for a counter-trend bounce. There is much frustration over the political wrangling in Congress but the great likelihood is that a $2 trillion deal will be done no later than Tuesday. While that deal will not fix the coronavirus problem it will provide some relief and have a positive psychological impact.
The market's biggest problem lately has been its inability to gain much clarity about the coronavirus. It is impossible to discount the economic damage when there is no idea of the coronavirus's duration or intensity. However, more states, such as Michigan and Indiana, are issuing 'shelter in place' orders, and there are some signs that expectations about the number of cases is becoming more realistic as more cases are done.
Another positive is that some of the data from overseas are indicating that the number of cases is slowing and even declining. While there isn't much clarity it is helpful to see that even in Italy there are some signs of improvement.
Market players have been anticipating some sort of counter-trend bounce action and with a little better tone about coronavirus situation, and the spark of a major fiscal stimulus, it may be a good time for it to develop.
I'm playing this bounce with some ultra-long ETF's with very tight stops. It is still very early for buying of individual positions and whether this is THE bottom or not is irrelevant.