The mood has been negative all morning as market players contemplate the possibility of failed trade negotiations with China, but this is exactly the sort of action that had consistently led to an optimistic headline that causes a fast spike. It is this dependency on news flow that is making the market so challenging to trade lately.
Typically, traders welcome increased volatility but not all volatility is created equally. The volatility that results when the market is undergoing a change in character is quite different than the volatility that is created by conflicting news reports. The recent swings are primarily a product of uncertainty that the market is incapable of discounting rather than a change in sentiment that tends to impact market behavior on an incremental basis.
The good news today is that expectations for a China deal have been reduced and the market is starting to price in the chances of a protracted trade war. It will be easier to trade the action if market players are less hopeful. If the action we have today continues it will likely be a good setup for a 'buy the news' reaction later in the week even if there isn't any big positive news.
There are many stocks on my radar that continue to trend down which are becoming increasingly enticing but 'cheap' stocks have a way of becoming even 'cheaper' in poor markets. There is no way to count on valuations to signal when a stock is at a turning point. That requires technical proof. At this point, the charts are not supportive of building positions in individual stocks.
There may be a setup forming for an index bounce in the short term but don't spend much time, energy or capital buying individual stocks right now.