A trader works on the floor at the New York Stock Exchange (NYSE) in New York, U.S., February 28, 2020. Brendan McDermid | Reuters

In a market that raced to its fastest correction in history and the worst week since the financial crisis, it's easy to imagine a frantic dash for the exits in which everyone is selling everything at whatever price they can get. That's not, however, what market veterans have seen this week. Instead, they describe market trading volume about where it should be. Orders are getting filled though spreads are wide between what sellers are asking and what buyers are willing to pay. Retail clients have been largely calm, even amid a fusillade of red breathtaking in its speed and indiscriminate in its direction as virtually all areas of the stock market are getting smashed. There was no prevailing consensus over whether the selling was justified, but rather the idea that momentum and machines have seized the moment, and this, too, shall pass.

"We let the high-frequency traders basically take over the market, and that's what it is. You just have to deal with it," said Michael Cohn, chief market strategist at Atlantis Asset Management. "It's short and quick, not painful and long. I've gotten zero calls from clients this week. The fact is, the public hasn't even panicked at all." "It's been incredibly orderly," JJ Kinahan, chief market strategist at TD Ameritrade, told CNBC. "For those with 401(k)s and long-term positions, this is a blip on the radar. If you're nervous, look how you've done for the last two to three years." Current market conditions this week, though, suggest something other than an orderly sell-off. Friday added yet another chapter in what has been a miserable week. A choppy day of trading saw the Dow Jones Industrial Average lose more than 1,100 points early on, more than halve those losses in the afternoon, then slip back toward a steeper decline before finally finishing off 357 points for the day. There was a plethora of theories about what was happening — programmed trading, forced selling, margin calls, commodity trading advisor funds bailing out — though investors had as little understanding about what was causing such an aggressive tumble in the market as they did about the future path of the coronavirus that had inspired much of the damage.

'Waiting for peak panic'

It wasn't just the virus that rattled investors. Market pros cited a trail of unsettling headlines that helped trigger this week's crush: a cadre of Federal Reserve speakers offering little hope of rate reductions, the Bank of Korea declining to cut despite recession signs and market expectations, and the S&P 500 late last week breaking the barrier of trading at 19 times forward earnings, the first time that's happened in 18 years, among others. Investors largely held their breath, hoping for the selling to exhaust itself. The lack of panic, in fact, may be a negative. "The market is waiting for peak panic," said Quincy Krosby, chief market strategist at Prudential Financial. "It's waiting for capitulation, where it's just exhausted." "You have to believe that with the ferocity of the selling, there are those mechanisms in there other than human selling, the software that exacerbates that selling. It has that feel," she added. Though there may not be outright panic, there is a high level frustration.

Those looking to downplay the coronavirus threat have been comparing it to the flu, which kills 61,000 people a year compared to the coronavirus, which had resulted in 2,867 fatalities as of Friday afternoon, according to Johns Hopkins. But the flu can be modeled because it has a long history. Things like the coronavirus present unknowns to the market that make the impact difficult to predict. "It's Wall Street vs. a virus. Who wins?" Krosby said. "If this becomes a scare not just in the stock market and companies are forced to lay off people because of this, then you've now created another feedback loop. That's what this is, one feedback loop after another." In such a scenario, it becomes easy to buy, but not so much to sell, a condition that drives prices progressively lower. "Bids are definitely being bought, but I think people have gotten way too panicky, way too nervous," said Joe Saluzzi, a principal at Themis Trading. "What we're seeing is we've got normal volumes through buyers and sellers. Sellers were having it tough this morning. But it doesn't feel as bad now as it did this morning."

Investing strategy