The Causes of Price Movement
A great mystery in all technical analysis is that all elements of what appears chaotic are attributes of supply and demand, growing from fundamental trends. There is some truth in this, but there is more. Trends on the technical side often seem to develop with little or no regard for fundamental strength or weakness. Technical trends often diverge from what the fundamentals seem to indicate. Investor sentiment is not always reflected in the numbers, so price reflects a combination of supply and demand along with behavioral psychology in the market. And that contains many elements.
Much emphasis in technical analysis is placed on the rationale of price movement, represented in patterns and trends. However, the uncertainties ...
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