EXPLAINED - "Why markets move in waves"
Markets do not move because of news.
They move because of people.
And people always feel the same things: hope, greed, fear, and panic. In that order. Every single time.
Here is what actually happens:
Phase 1 — Disbelief Price starts rising. Nobody trusts it. "It is a dead cat bounce." The crowd stays out.
Phase 2 — Hope Price keeps rising. A few people buy in. Headlines turn cautiously optimistic.
Phase 3 — Greed Price explodes. Everyone piles in. CNBC covers it. Your friends talk about it. This is Wave 3 - the strongest move.
Phase 4 — Denial Price starts falling. "Just a dip. I am buying more." This is Wave 4.
Phase 5 — Euphoria then Panic One final push higher. Then the collapse. Wave 5 completes and the correction begins.
Then the news arrives to explain it.
But the news did not cause any of it.
The crowd caused it.
Ralph Nelson Elliott discovered this in the 1930s. He studied 75 years of market data and found that price always moves in the same wave patterns because the humans behind the price never change.
Fear and greed are not modern problems.
They are permanent features of human nature.
That is why the waves repeat.
That is why they will always repeat.
And that is why studying the structure gives you an edge that no news feed ever will.