Quote Originally Posted by MJZiggy View Post
But if profits are up, there is SOME health there. There are other indications too, like my house selling in 12 hours with two offers, each for $10k more than the asking price, and the fact that my company can't hire fast enough, nor can our colleagues.
You always have to be cognizant of the quality of any reported profits. Many companies achieve profits through accounting. There has been a lot of that recently.

It seems there are isolated pockets in the economy that are doing well, but overall it is unclear how healthy the economy really is. Much like real estate. In some areas prices seem to be recovering slightly, in other areas not so much. One resulting of tapering is likely to be an increase in mortgage rates, which could foster a decline in prices and/or slow down in sales.

Many investors are scarred of the stock market right now, with the experience of losing a lot of money just a few years ago. Many have sat on the sidelines during the last couple years, when good returns were relatively easy to achieve. Many who have gotten back into the market are leery of any change in the economy, and will sell because of a change without knowing if its good or bad. In short, there was some panic selling just because of the announcement. Panic selling means a decline in prices.