Nature of Economic Behavior

There are several "Driving Forces" that influence/impact the market. Below is the natural and rightful trend...

Human -> Economic Indicators -> News -> Market Performance

This look alright but rethink again, the factors under Human Force would be Emotion that leads to various decisions/actions before causing the reading of Economic Indicators then Positive News before affecting the Market Performance.

But anything that is unjustifiable under any of the categories above will cause a mess/false-alarm. This is what we (at least myself and some others) are seeing now...

All the numbers published out there are either partially inaccurate or inappropriately calculated, such as the slight decreasing Monthly Unemployment Rate will not mean the Total Unemployment Rate is low (remember we are near the level of historical crashes).

Also anyone dare to say we found the Real Bottom of the crisis (Toxic Debt & Home Foreclosure) by providing the factual justification? Is the few trillions dollars are going to save the entire economy or else how much could it save then? Much more questions you may want to ask yourself from different perspectives but not from what you read from the mainstream news...

If the "Root Cause" is not finalised and found then fix it entirely, how the economy is going to recover fundamentally? What I am seeing now is that majority is influenced by the positive news (partially true / misleading) created by "Special Groups" of people and occasionally the main streamers will publish the articles based on the resulted market performance with their own perception / assumption.

I hope I could be wrong but one more powerful factor we should highly consider is the Reverse Psychology that always the Contrarian / Minority of people will benefit more than the majority of normal people in any market at any timing.

Projection: Another round of crash / serious correction should be in-place to wipe out all the speculated gains so far in order to ensure the economy is recovered fundamentally in steadiest pace. Let's watch out for the market performance in 5-6 months period till end of Q1-2010.

Wish all good luck and happy investing!