How are news generated?
News are always generated through stock prices (Demand/Supply)
How can the index chart tells us more about our economy?
Understanding the chart, allow us to know the level of demand our index has. Through technical analysis where it states market that makes higher high and higher lows is to be known as a Bull (Up) trend. Above, it is our current index trend.
How can knowing the chart help us?
Knowing that prices are at a level where overall demand is strong and momentum is appealing to the upside. We might want to find under valued/priced company to buy as market has a higher probability to trend upwards than downwards.
So why does everyone says that our economy is bleak?
Remember the index chart trend is based on a long term basis (as of now it is created through 1 year of candlesticks). News generation over a drop of a few percentage point tends to be over emphasis that builds fear into minds.
No.. all news said that manufacturing is down… job losses is up..
If you really do think about it… it is not just now that all of these are happening, but it has always been part of the whole economical cycle. Example, 2008 sub-prime and 2001 dot-com crisis.
Ultimately, everything in life is about an equal balance (Two polarity). You need to have the bad to have the good, you the warm to treasure the cold (Vice versa), you earn more money and someone loses more money.