Traders read the tape - ticker tape in the old days to determine the recent buying and selling pressure. Here lies the importance of volume. It's easy to spot a large buyer or seller when the volume is light. Big buyers usually enter before big moves.
Jesse Livermore read the tape and never fought it.
Of course there is always a reason for fluctuations, but the tape does not concern itself with the why or wherefore. It doesn’t go into explanations. I didn’t ask the tape why when I was fourteen, and I don’t ask it today at forty…, Reminiscences of a Stock Operator.
While the tape, often triggered by price in reaction or anticipation of the new flow, is triggered by price, it's fueled by force. Volume is the domain of force. Traders/investors must learn to read the force behind the trend.
The Volatility Index (VIX) sets 4-year low on Monday as experts grow increasing concerned but ineffective in offering explanation, bitcoin soars because the sh*t will hit the fan - taking down everything but the cyrpotcurrencies*, and public resentment towards politicians grows. These and other observations lead to one inevitable conclusion - the majority, a day late and dollar short in terms of timing will see their asses paddled from 2018 to 2020.
*This argument is no different that claims that gold will soar to $50,000, while most assets including stocks get crushed.
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