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The Market is a Forward-looking Indicator

That's something that investors need to remember. So if there is a disconnect between recent economic news and market action, they're not supposed to be connected, Instead, the market is supposed to reflect what will happen six to nine months hence.

GDP reportedly grew almost 6% in the fourth quarter of 2009 (before revisions), that is. But the market "knew" that, as early as March of 2009, when it finally turned around. And similarly, the weakness in the FIRST quarter of 2009 was foreshadowed by market weakness beginning in the summer and fall of 2008.

On the other hand, the market is now going down again. It's basically saying that the recent economic pop was just that, a one-time, non-repeatable thing. In fact, it may well be signaling the dreaded "double dip."

Up or down, the market is FORWARD looking. So you should bring your economic forecast in line with the market, not the other way around.