Supply, Demand, & PriceTechnical Analysis
Price action within the marketplace is always determined by supply and demand. Supply consists of people selling or desiring to sell an asset. Demand consists of people purchasing or desiring to purchase an asset. When the supply exceeds demand, the price will fall until an equilibrium between the two is restored. If demand exceeds supply, the price will rise until the equilibrium point.
Both supply and demand are based on the actions of investors or traders, and both parties act based on where they expect prices will be in the future. If investors and traders expect a fall in price they will shift to supply by selling the asset. This is also known as distribution. If investors and traders expect a rise in price they will shift to demand by purchasing an asset, also known as accumulation.
Their expectations are usually defined by their interpretation of fundamental and technical analysis. Note that we did not say is actually defined by technical or fundamental analysis, but by their personal interpretation of their analysis. Many people looking at the same information will arrive at differing viewpoints, often incorrectly, and take positions based on those expectations. If they are wrong they will reposition themselves, or incur losses from being on the wrong side of a price movement.
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International Economic Analysis:
- Major Currency Economic Summaries
- Performance of Major Imports and Exports
- Mandates of Central Banks versus Expectations
- Performance Indexes of Major Economies
- Economically Correlated Currency Projections
- Large Funds Currency Sentiment Readings
- List of Technical Indicators to Look For
- Occasional: Foregin Exchange Technicals Markups
American Markets Analysis:
- Summaries of American Economic Structure
- Performance of Major
- Federal Reserve Mandate versus Expectations
- Performance Indexes of U.S Economy
- Economically Correlated U.S Dollar Projections
- Large Trading Fund Index Sentiment Readings
- Market Wide Earnings Versus Valuations
- Fundamental Ranking of U.S Business Sectors
- Best and Worst Future Consensus Estimates
- Occasional: Firm Fundamental Strength Report
- List of Technicals to Look for While Trading
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