Is there logic behind market fluctuations? — Certainly there is.

But it is definitely not random; otherwise, Wall Street wouldn't survive, and market makers wouldn't have a livelihood.

What truly drives prices are three things: capital structure + emotional cycles + institutional games.

1⃣

Capital structure: Who is in the market, who is out, who has leverage, and who is forced to liquidate. Price fluctuations are often the transfer of positions among different groups, driven not by news but by positions.

2⃣

Emotional cycles: Greed and fear are always pulling at each other; the essence of market fluctuations is the amplification of emotional volatility — at the top, good news can lead to declines; at the bottom, bad news can lead to increases. Prices do not reflect facts; prices first amplify expectations and then reshape facts in return.

3⃣

Institutional games: Regulations, monetary policy, exchange rules determine whether money can enter, how quickly it can exit, and thus determine the speed and magnitude of fluctuations.

In other words:

The logic behind market fluctuations is not price → logic, but logic → capital flow → price, and then price influences logic in return.

If you try to explain the reasons for an increase or decrease with a single formula, you will surely be disappointed!

Today is a red day, very suitable for reflecting on the logic behind your upcoming operations.