Here is an interesting article about the normal path of the past few bear market crashes and aftermath recoveries, and if this one roughly follows the past few, what to expect:
This website contains writeups by many different authors, most of whom are involved professionally in the market one way or another. On any given day, you'll find a wide range of opinions and perspectives that vary and contradict each other greatly. The reader comments on these articles are often useful too, as many of them are laymen, but seem to be active investors who follow the market.
This article that I linked is one that I would put some belief in normally. Typically, markets don't bounce back immediately from a crash scenario, but have a short but sharp relief rally, followed by more gradual down movement, then recover at different paces in the long run depending on what caused the drop initially. This market was already overextended and especially with corporate debt, so was just waiting for the pin to pop it. Coronavirus was a sharper than usual pin.
However, the amount and types of QE being rolled out by the Fed and the stimulus from Congress are rather unprecedented, so that throws a definite curveball into the discussion. As do the unknowns with how well we will follow social distancing nationally, how that will impact recovery from the virus, and whether any medical treatments will surface in the shorter term that actually have an impact. So it's really anybody's guess as to what may happen, though I do believe that patterns of behavior in the market tend to rhyme, though not repeat.
Here are a few other factors that I've come across in my readings the past few days, some of which aren't too surprising, and others that may be:
- All assets including normal safe harbors were being sold during the crash, often to cover margin in other areas or raise needed cash. So stocks, bonds, and precious metals all sold off.
- Long bonds/treasuries would normally have seen their interest rates go down as people fled to them for safety. But the market for them was strange and illiquid, and the demand did not raise to the point where the interest rates were going down, instead they went up. I read that it actually got to a somewhat dangerous point where the Fed had to jump in with far more than normal purchases of treasuries to stabilize the market. Just repeating what I read here - I don't work in this field, to know enough for sure.
- There were some very technical articles I read by traders and analysts from wall street firms, but didn't really understand. But the gist was that things got pretty out of control for even the professionals with the speed of the drop, and a lot of the extreme measures that the Fed took were considered pretty necessary and important to stabilize things in the short term.
- While there may be a pullback from today's upward jolt, there is also a quarter end rebalancing that will take place at the end of March. Since many funds sold off stocks during the crash this month, there may be a batch of repurchasing of stock that will boost the market towards the end of the month too.
One other thing being posited is that all the QE and money spraying will likely lead to precious metals becoming a more favored safe haven again (after the recent sell off). I took a speculative position a few days ago anticipating this, and I expect it will go on for awhile, as gold and silver caught some large bids the past few days.