My latest thoughts: today's surprise data on ISM Manufacturing suggests the possibility of a recession in the US. The odds of a dec fed hike have receded once again as witnessed by the spike in treasury bond prices. If more evidence comes via the payroll numbers on friday, there will be no hike in Dec. Implications for the markets means higher bond prices, higher stock prices and lower oil prices.
Although I don't disagree with you, its a crazy world we live in to think that bad news about the economy will lead to higher stock prices. At some point though, there will have to be a decoupling from what the FED does and how the market reacts. This time around, they really are in a pickle. They almost are damned if they raise, and damned if they don't. So perhaps this decoupling is going to happen sooner than we all think.
The "decoupling" is always at work, but I get what you are saying...Look at the months leading up to the August swoon...major indicies trading in a volatile, but contained trading range, while more broad based indicies (or equal weighted) were decoupling from the headline indicies...then in a stretch of four days, everything converged for a short period of time...Now we are back in a similar predicament, but the heavily managed headline indicies go flat for long periods of time and are then "re-adjusted" in the middle of the night on minimal volume (i.e. Rickshaw market). The fact that CB's are major buyers of equities (and are de-facto hedge funds now) is/has been an enormous game changer...It just completely distorts everything.
Don't you guys get tired of materializing scenarios that never happen? Most important, when it finally happens, will it make up for all the times it did not? Crazy stuff.
Maybe you should use the quote feature in an effort to avoid generalizations... btw, why aren't you posting as MarkBrown?