The market has been in the doldrums. Is this, as some market analysts contend, the pause that refreshes? Or is it, as economist Henry Kaufman argued last week, the end of a ''pleasant interlude'' that the market has been enjoying?
Either way, investors' uncertainty of late has reversed the bullishness that characterized the stock market even two weeks ago.
Although there is plenty of evidence that the economic climate is healthy, investors want to know about the economy six months or so hence, when their investments begin to pay off.
Yes, it looks as though inflation is down for the count; yes, interest rates are falling; yes, Reaganomics is likely to survive Nov. 6.
The federal deficit is still untamed, and the announcement last Thursday of a final 1983-84 deficit tally of $175.34 billion brought that home.
Some savants continue to warn of clouds within silver linings. Major banks lowered the prime interest rate to 12 percent last Friday, but not even that encouraged investors.
Influential economist Henry Kaufman of Salomon Brothers told investors Thursday ''that the upward cyclical direction of interest rates is still intact.''
His may be a gloomier than normal assessment, but there is reason to believe interest rates are not on a nonstop plummet. The falling prime rate had been anticipated some days before, many analysts say, since open-market interest rates, from which banks draw their funds, had been falling.
Thus the lower prime may not be so much the start of - or even the continuation of - something big. It could be the tail end of what has already taken place.
Then there is the election.
Though most big investors (who, in polls, have indicated clear preference for the Reagan administration) apparently expect Mr. Reagan to win, they still wonder about the economy in the months ahead.
And beyond the election, there is the threat of recession.
Irwin L. Kellner, a Manufacturers Hanover bank economist, pointed out in a recent report that, while business generally does well during a presidential election year, ''it tends to suffer in the period immediately afterward.
''With only two exceptions,'' Mr. Kellner says, ''the United States has had a recession within 13 months of every presidential election since 1944.''
He notes that the business cycle is already approaching ''middle age.''
Hence, the uncertainty.
The Dow closed the week at 1,204.95, falling 20.98 points in five sessions. It was down 6.07 on Friday.
Economists such as Dr. Kaufman may be pessimistic about the markets, but many technical analysts and portfolio strategists continue to argue that the long-term trend is highly positive.
At present, many analysts argue, the market is pulling back, catching its breath. Of course, if you are heavily invested, seeing the market catch its breath may not be a particularly joyful experience.
''The market is clearly worried,'' says Barton M. Biggs of Morgan Stanley. ''But we continue to feel that the next major (market) move is up.''
Market strategist Hildegard Zagorski of Prudential-Bache agrees. She views the market as having been consolidating after a fast run up to the 1,240 level. The market had been ''severely overbought,'' she says, pointing to low levels of institutional cash to fuel a bigger up-move and indicators of sentiment that have been ''too bullish.''
''On the other hand,'' she says, ''there is much money in money-market funds. If interest rates decline and money-market funds go below 10 percent, then you might see a lot of that money come out of those funds'' and go into the stock market.
Since Pru-Bache is not ''trading oriented,'' Ms. Zagorski says, it recommends ''positioning stocks'' by using current weaknesses in the stock market as buying opportunities.
She says Prudential-Bache forecasts a pickup in the economy in the fourth quarter of '84 and a strong economy throughout '85: ''Interest rates are coming down, we've lowered our inflation estimate - everything's rosy.''
She says investment strategy is to avoid the old inflation hedges. These are the commodity-oriented companies: metals, timber, etc. Although one should be very selective about which stock to buy, Ms. Zagorski says those that will do best will be retailers, restaurants, electric utilities, insurance companies, automakers, and certain high-tech firms such as IBM, Digital, and makers of CAD/CAM (computer-aided design, computer-aided manufacture).
Philip B. Erlanger, chief technical analyst of Advest Inc., in Hartford, Conn., also argues for the ''long-term technical attractiveness of the market'' and encourages small investors not to ''stay on the sidelines.''
In a recent investment strategy report, he writes that watching how the big institutions dominate the markets, initiating their ponderous buying and selling programs, may make the little investor feel relatively overwhelmed. But that should not be the case. He argues that ''no one is more capable of changing portfolios to the tune of the market than the individual investor.''
''After all,'' Mr. Erlanger says, ''when it comes to being nimble, Bambi has it all over Godzilla.''
Interest rates Percent Prime rate 12.0-12.50 Discount rate 9.00 Federal funds 9.63 3-Mo. Treasury bills 9.68 6-Mo. Treasury bills 10.17 7-Yr. Treasury notes 11.89 30-Yr. Treasury bonds 11.75 Source: Bank of Boston, other banks