Sunday, July 10, 2005

Turbulence


Turbulence in the market consists of conflicts in the underlying fundamentals.

The worse the turbulence the less effect a "normal" news item about the market or a security will matter, the less effect it will have on it's direction and momentum.

An overwhelming piece of news creates a sort of wave or turbulent effect which has to die down or run its course before any others news can be seen to have an effect on trading or price.

A quiet market shows the least effect visibly.