If interest rates need to be lowered to help the economy, why would the stock market rally on that? Isn't it an admission that the economy is soooo weak that it needs intervention by the Fed?
In the 90's, the lowering of interest rates was an indication that more money would be invested in businesses and then in the stock market. As long as inflation stayed in check, the Fed could lower interest rates to promote growth. I'm clear on that.
None of this is the case now. Nothing but an obvious bottom is going to bring a surge of money into the market. Surely, any fool that pays attention can figure that out. I would think that interest rates remaining stable is actually a *good* thing since a hike would indicate inflation and thus over-valued stocks. Maybe this is why I'm not an institutional investor. The market seems to move randomly since 9-11. The market is a mass social phenomenon, not an economic one, and right now, people are confused about the state of the economy. That certainly accounts for randomness. In the 90's, they were, um, irrationally exhuberant, which also accounted for the markets.
This means, of course, that the real key to figuring out the market is to figure out what people think. On that note, I've been reading this lately. Robert Precher is a technical analyst with an excellent record of predicting the future. Back in 1986 when I worked for brokers at Drexel, the stogiest of them subscribed to his newsletter, and then I bumped into his ideas again this year when searching the whole idea of technical analysis.