after a 100 tosses... heads and tails are both there
unchanged with equal probabilities...
So How does this equate to stocks..
Given a narrow price spread over a sufficient time frame
and good and growing volume....
What you have is a large change in ownership...those who want to sell to those who want to hold..
At a certain point one side of the coin so to speak is No longer there....The probabilities are not 50 50 at all...
OK in a panic ...buy side vanishes price gaps down.. 50 50 ? would he buy all the way down ?
When buying does surface and demand meets supply then maybe for a while 50 50 .....
However the coin always has two equal sides.. Stocks do not...
Shares outstanding are a limited finite number always held by stronger or weaker hands
"Value and Volume
The amount of dollars (value) and the number of shares (volume) exchanging hands daily, constitute limited resources. The money spent in buying one stock is no longer available for acquiring another stock. Similarly, once an investor buys a share, this share is no longer available to other investors.
The daily volume reflects the attention investors paid to that stock that day. Active stocks sometimes attract considerable attention even from non-investors. They receive special mention and may be highlighted in more than one article in the daily newspaper. The value exchanged over a company's stock in a day is less visible but unquestionably reflects the extent to which the stock tied up investors' dollars that day. If money and attention go to one stock, they do not go to other stocks. Unlike price, these variables do represent limited resources.
Volume and value obey the law of competition directly. Prices come into the picture only indirectly, and so do the various price-based indices, such as, the Dow Jones Industrial Average (DJIA). Many analysts and forecasters have long slaved over curves and historical data of the DJIA searching for structures, periodicities, waves, or other observations that would help anticipate future patterns. Patterns in the evolution of the DJIA sometimes correlate with patterns in the evolution of the share volume and the dollar value. But if we want to quantitatively study growth in competition at the stock market, via such mathematical formulations as the logistic equation, and the Volterra-Lotka system of equations, we need to concentrate on the variables that intimately relate to competition and its fundamental mechanism."
from " COMPLEXITY AND COMPETITION AT THE STOCK MARKET
Theodore Modis
Presented at the 5th International Conference of the Decision Sciences Institute
4-7 July 1999, Athens, Greece."
no equal sided coins here ? only stocks going up and others going down
Demand absorbing supply... Or supply overpowering demand ....
Do the buffet and lynches expect to see the fundamentals overtime reflected in share prices..
How efficient is the market if efficiency in liquid stocks is efficient within a factor of 2 ?
And P&F ? here will enter the world of market time
versus clock time....and if nothing else a correctly scaled P&F chart with a bearish supply line on a down trending stock would keep most people out of most of the stocks that they should be out..
Yes some ( a lot ? ) TA is probably bullshit..
But stocks are driven by supply and demand and shares outstanding are finite...
Coin is not driven by supply and demand two sides are always there
With stocks one side is always vanishing ....
Sometimes only heads and sometimes only tails
and sometimes tails all the way down with hardly ahead to be seen ... and 50 50 ?
The fat tails always will get you !
And even a small bias over time can mean Huge gains...
Technical position is something to gauge.. And ? profit from....
