“The relation between the stock exchange and the economy is like a man walking his dog. The man walks slowly, the dog runs back and forth.”(Andre Kostolany)
This quotation from Andre Kostolany shows how markets work most of the time. For example, sometimes markets react to economic news in a way nobody would have thought off and sometimes it just seems to ignore the economic “reality” outside the market.
You can see this best by watching the movement of single stocks…