An article in Morningstar describes the four stages that a typical bear market experiences and discusses them within the context of the coronavirus-related downturn.

• Stage 1: Recognition. “This market achieved stage one during its third week. Stocks were up slightly for the year, before suddenly dropping 11% in the last week of February.”
• Stage 2: Panic. “This occurs when shareholders realize that the standard advice failed. Buying on the dip wasn’t easy money, as it is nine times in 10. Rather, it led to greater damage.” Noting that the market’s fall (during the third week of March) was the fastest descent since The Great Depression, the article characterized that week as part of the second stage of the bear, adding, “It is difficult to apply rational analysis when so much happens, so quickly.”
• Stage 3: Stabilization. “The panic subsides but the situation remains grim,” the article explains, adding that at this stage investors understand that equities fell for “good reason” and that, until that reason is resolved, they will continue to struggle and losses will not be quickly recouped. This stage is marked by turbulence.
• Stage 4: Anticipation. “This is when stocks start their recovery. As with the bear market’s beginning, almost nobody recognizes its end until after the fact.”

The article  emphasizes that these stages apply to bear markets “that are primarily caused by recession fears” but don’t necessarily hold true for those arising from other causes –citing the examples of the 1973/1974 decline fueled by rising inflation fear and the 2000-02 tech stock bubble.

The article concludes: “Should the picture become clearer, the four-stage scheme figures to be relevant.” It adds a prediction that the market should enter the stabilization stage soon which, while not a guarantee against further declines, would mean that the “struggle will at least be bounded. Within months, not years, the stock market recovery should begin.”

That said, the article notes that if uncertainty related to the coronavirus remains high and unresolved, “then all bets are off.”