Tuesday the Center for Disease Control (CDC) put out a public advisory for Americans to be prepared for broad-based Coronavirus infection in the U.S. This clearly panicked investors, accelerating the stock market selloff. Market corrections usually end in climactic selling; this one is no different. A catalyst is usually needed and this CDC advisory just may be it.

The next question is what kind of a bottom will take place. A V-bottom sometimes occurs but seems unlikely this time. Other times, a correction makes a series of panic bottoms. These may take place in series after attempted recoveries. This scenario is more plausible because of the likelihood that containment of this viral outbreak will be hard to spot. Good news may follow bad, then bad again.

Some investors want to buy bargains, but timing may be tricky. If they are too early, they may be quick to sell on adverse news; others will join in. Bottoming for the stock market in that case is a process. Although impossible to foresee, this is more of what we believe is likely.

Most of the damage may already be behind us. It’s just that recovery may be ragged and drawn out.

The Lonely Bull