Big gap down opens like we are seeing this morning tend to produce reflexive dip buying, but confidence levels are very low and there is a greater inclination than normal to flip for quick profits rather than to hope for an extended ride.
I used the opening weakness to close out index shorts and have no index exposure at this time. I'll be looking for a trade into the employment report tomorrow. This report is likely to be one for the history books with the highest level of weekly unemployment claims ever. While a big number is expected, I'm not so sure that the reality of what this means for the economy and consumer sentiment is fully appreciated by the market.
Although I would love to focus more on individual stock picking there is still too much volatility for charts to develop in a productive manner. Stocks are almost totally correlated which means they move in tandem without much regard to their individual merits. There are a few Covid-19 'plays' that aggressive traders focus on but aside from that small group, most everything is bouncing around with the indices.
Trading is all about overall market direction right now which means you simply have to choose the vehicle you want to use to participate. Some folks use various ETFs and others like big-cap names that may have a little more volatility and may not be totally correlated to the index. Microsoft (MSFT) is a stock in that category right now.
The easy thing to do in this market is to start hunting for 'bargains' but there really is no reason to think that stocks have found a low. The only reason you buy now is due to impatience as risk is very likely to decline in the weeks ahead. Buying the exact low is not an important issue. The important issue is buying when you have the best chances of sustained upside movement and that has nothing to do with whether the stock or the market is at a low.
It is a good idea to take very small positions in favorite names as it helps you to understand the movement better, but keep your ammunition in reserve and don't deploy that precious capital until the right conditions develop.