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I am certainly glad this week is over. The Standard and Poor’s 500 Index (SPX) closed today at 2954, down 402 points for the week, or -13%. The most amazing price action occurred in the last 6 minutes of trading this afternoon. SPX gained 43 points or 1.5% in only six minutes. I am impressed by the large price recovery on the daily price chart of 98 points, or 3.4%, from the trading session lows to the close, but half of that increase occurred in the last six minutes. I have never seen such a large price move squeezed into such a narrow slice of time. I was tempted to bet the farm on SPX calls for Monday, but I resisted the urge.

Trading volume rose every day this week and remained above the 50-day moving average (dma) all week. Trading volume spiked to 5.1 billion shares today. One must go back to Christmas Eve 2018 to get close to this level of trading volume. Even the February correction of 2018 was at lower volume.

The volatility index for the S&P 500 options, VIX, gapped open to start the week at 22%, steadily rose all week, and then spiked up to 49% intraday on Friday before closing at 40%. These levels of volatility are pretty rare. The last time we saw volatility spike this high was in the market correction of February 2018.

The NASDAQ Composite index opened lower at 8270 but traded higher all day to close at 8567. NASDAQ was the only broad market index to trade positively from the open today. From the recent high on 2/19, NASDAQ corrected 16%. The high tech favorites of the NASDAQ took this correction the hardest earlier in the week, but recovered significantly today. Apparently that optimism spread to the S&P 500 late in the trading session.

I have been skeptical of the panic over an imminent coronavirus pandemic for the past several weeks. When I looked up the number of deaths resulting from flu infections each winter, it put this news and breathless media coverage in clearer perspective. The CDC clearly has a responsibility to protect the American public. Starting a panic isn’t helpful to that end. Publicly stating that a coronavirus epidemic in the U.S. was inevitable was irresponsible.

According to the latest comprehensive Global Health Security survey, here is the United States' current preparedness rank: Overall: #1, Prevention: #1, Detection and Reporting: #1, Rapid Response: #2, Health System: #1, and Compliance with International Norms: #1. By comparison, here is how China ranks: Overall: #51, Prevention: #50, Detection and Reporting: #64, Rapid Response: #47, Health System: #30, and Compliance with International Norms: #141. It is astounding, given the lethality of this coronavirus variant, that the death toll among China's almost 1.4 billion people, most of whom are impoverished, is not already an order of magnitude higher than reported.

All current economic data are very solid. But the markets are at high levels of valuation. Perhaps that set up traders to panic and sell at the slightest scare. The S&P 500 index corrected 16% in only seven trading sessions. Today’s trading patterns and the dramatic decline in volatility are strong signals that we have either found the bottom or are at least close to the bottom of this correction. But the market won’t recover in seven sessions. The correction of February 2018 required about six months to fully recover. Normally the market retests the correction low at least once before recovering. This is a dangerous time to jump back in with both feet. I will be keeping a close eye on that 2860 level on the S&P 500 index. It will be surprising if we don’t revisit that level before the storm is over.

Be cautious and nibble at some favorite stocks at bargain prices, but trade small. Even if the market opens strongly and trades higher on Monday, be cautious.