An ill-sighted policy, but striving at a wealth effect. The housing market was already crashing in 2012, and gold was booming so much so it seemed like a peak. Wages were stagnant and had been for some time. So where to encourage people to have a feeling of generating wealth? A stagnant stock market.
I have a feeling the Chinese leadership, as a body that agrees on consensus, understand western economic and political history better than anywhere else in the world. They also have a sense of control over messages that get sent out by official media.
This combination led to a belief that nothing can go wrong when the 2 are put together: in this case a stampede to the stock market and quite a few savvy investors recognising this.
This search for a wealth effect reflects something much deeper, however: There is deep malaise in China's economy which is felt across the board, and there is a desperate desire to keep the ball that has rolled for the past 20 years to continue rolling.
Furthermore, why do you think the FED should've raised raters earlier? Supporting the stock market is not their mandate and it is thus not directly relevant whether and how long has the current bull market lasted. A big market crash just a few years after 2008 (and 2011) would've certainly had a dampening effect on recovery so they might have felt justified in increasing the money supply. Inflation is running low, economic growth and labor markets were very weak for many years after the 2008 crash. They had pretty good reasons to be supportive.
Most normal people buy and hold. (Personally I have a mix of bond and stock index funds)
But for a day trader, decent sized jump could be a problem. I don't have a ton of sympathy though since day trading is basically gambling.