It was another day of selling but what was most troubling about the market was that another blast of monetary policy by the Federal Reserve failed to provide any comfort. The Fed announced unlimited QE but not even the financial equivalent of an "all you can eat" cafeteria was able to halt the selling.
An additional problem was that Congress was unable to move ahead with the $2 trillion fiscal stimulus that the market is eagerly anticipating. Market players were disgusted with the self-serving political agendas that overlooked the urgency of the situation. There are still high hopes that a deal will be worked out quickly but the contentious negotiations did not help the sour mood that already exists.
Despite the negatives, there were a few glimmers of hope. It was an NR7 day for the S&P 500, which means it was the narrowest range in seven days. This is viewed as "pause" action that will set up a move higher, but the ranges have been so wide lately that it was still a very volatile day.
Another positive was better relative strength in small-caps. The Russell 2000 ETF (IWM) was down 1.5% Monday, which was about half of the loss in the DJIA and S&P 500. Technology stocks also did well with the Nasdaq 100 ETF (QQQ) close to flat on the day. There are stocks that seem to be finding some support and that is a good indication even though the senior indices are making new lows.
If Congress can pass a stimulus bill then the chances of a counter-trend bounce are looking better. There is more data on the coronavirus and even talk about plans to return to work. While there is still much uncertainty it seems that we are starting to get a handle on how things might progress. Fear of the unknown has been the biggest market negative and that is starting to ease, if just slightly.
Keep in mind that the market will need to do a lot of work to repair the damage that has been done and it still needs to stabilize, however, it doesn't look quite as bad as it did last week.
Have a good evening. I'll see you Tuesday.