But one thing was for sure, more volatility was on its way, Craigs Investment Partners broker Chris Timms said.
It was not the weakness in China driving the global sell off. It was the fact the United Share market had run without a correction since the first quarter of 2012. That was a long time for the market to go without a breather.
''It's too early to say we are out of the woods. We might see a significant rally and a further significant sell-off.''
The New Zealand and Australian markets stabilised yesterday and Tokyo shares rebounded after heavy losses.
The Dow Jones briefly fell more than 1000 points before paring losses.
Mr Timms said some commentators were confusing the Chinese economy with the Chinese sharemarket, which was dominated by retail investors who borrowed to buy shares.
When margin calls were made, the retail investors who had borrowed had to sell off at any cost to repay their loans.
That was likely to continue, despite the Chinese Government instructing investment funds to put money in the sharemarket.
Wall Street futures pointed to a rise in the Dow today. Yesterday, the NZX50 started down before rising once some key Asian markets opened at 2pm New Zealand time.
Hayes Asset Management portfolio manager Craigs Robins said the global and US recovery theme was being tested.
Global stock markets were oversold and could easily bounce from here. However, if the US Federal Reserve did not change its monetary tack, there was a risk markets could fall further.
US dollar weakness had taken centre stage and financial asset market volatility was back after an absence of three years, Mr Robins, of Queenstown, said.
''The US economic recovery that is built on seven years of quantitative easing, zero interest rate policies and a shale oil boom, is being challenged by the collapse in oil prices and slowing global growth.
''Backed into a corner, and in an effort to maintain monetary credibility, the US Fed is likely to point the finger at China.''
The Fed had missed the opportunity to raise interest rates in the current cycle and now faced the prospect of having to make a U-turn on monetary policy, he said.
If the Fed ''spin'' in coming weeks did not stabilise the financial markets, liquidity-fuelled share and property markets could start feeling the heat, as witnessed in recent days.
In that scenario, the Fed would undoubtedly respond with additional monetary assistance - QE4, or equivalent, Mr Robins said.
