Sheep in Suits

It strikes me that the traders on Wall Street are nothing but sheep in suits. I won't pretend to know the first thing about the stock market, but what I observe is an odd paradox upheld by two opposing theorems:

1. The stock market is held up, at least subconsciously, as the driving force of the economy.
2. The stock market is held up as an indicator of economic strength.

Don't believe me? Let's take an example from the news, just days ago:

Example 1: Link: Technology buying drives Wall Street higher. Summary: buying of technological stocks was improving the overall strength of the economy in that sector. Therefore, investors had more faith that technology was still a good investment. Conclusion: This falls mostly under Theorem 1 because it shows that investors drive the mood of the economy with their money. Of course, all of this buying and selling, this assurance and doubt, exists mostly in our minds, on computer screens, and on paper. This paradoxically encroaches on opposing Theorem 2, because investors are essentially investing in investors investments.

Example 2: Link: Dow loses 679.95 as economy, Bernanke revive fear. Summary: Let's regroup. That news in the first example was so last week. Today's article essentially states that traders sold shares because they were afraid they would lose their investment based on reports and what other traders were doing. Conclusion: Thanks Roy, you've upheld Theorem 2 wonderfully!

So then, what is one to do when the stock market drives the economy which drives the stock market? They are like sheep in a field, following only each other. Confidence breeds confidence; fear breeds fear. Right now, investors and consumers are being told to fear. What do you expect will happen?