Human nature wants a bounce. Traders and investors underwater want a bounce. Even people I know that don't follow the market want to see several big up days in a row so the market quickly recovers losses, but I think that's the wrong thing to want here.
No, I don't think we want to see continued downside. A big red (lower) open followed by a slow progression throughout the day to green would be great... from a trader's perspective, but what I believe the market needs is a week or two of boredom. We don't need the markets closed, that's way too boring. We need some flat days. We need a few weeks of moves that are 1% or less. Remember those?
Huge bounces after huge drops are hallmarks of a bear market.
We need flat days. We need much smaller ranges. We need boredom!
No one can get comfortable with a Volatility Index closer to 100 than it is to 50. There are no models for that.
If you want to attack things from a valuation angle, the question is how? How do you model the financial impact of the Coronavirus? We're not seeing companies guide lower, we're seeing companies simply withdrawal guidance due to uncertainties. When one or two companies do that, then it may be company-specific, but when entire industries do it, you have problems.
Additionally, we need details behind bailouts. While there are proposals on the table, until we get details of the airline bailouts, it is difficult to protect not only who will survive, but how will they look later on down the road. Will there be a high level of dilution or none at all? Will Boeing (BA) be included in the mix? Will hotels and casinos be included?
For any rally to stick, the market needs to address uncertainties. That will happen before there is a cure for the virus. That should happen before the virus even peaks in the United States.
Green is good, especially on St. Paddy's Day, as we certainly don't want to see a gap and crap day for the bulls, but rather than wishing to find the entire pot of gold today, the markets would be better off finding a few coins of increased wealth each day until we're comfortable with the current path.