The effect of good news and bad news?

Discussion in 'Technical Analysis' started by Jebediah, Mar 1, 2016.

  1. Jebediah

    Jebediah

    Indeed... I suppose the question is more of a theoretical one being, does the market require more selling to further lower the price?

    i.e what would happen if a lot of people were short but no more longs or shorts entered positions. Would the price continue to fall lower and lower or would there need to be a fresh batch of shorting for the price to drop even further.

    selling causes the price to fall but if everybody has already sold then there is nothing left to push the price lower and the only only thing left would be for the shorters to buy back their positions, causing it to aggressively reverse, meaning at some point bad news stops having such a negative effect. no?
     
    #11     Mar 7, 2016