A CATALYST

Ran into someone today who proceeded to explain to me how the markets work.

He said along with many others one of the most annoying things to a reverse causality believer. He said to me that the market will only turn on the back of a catalyst. Something must trigger the reversal.

Markets simply reverse direction due to exhaustion of the underlying trend. The reason could be from a myriad of different sources the point is simply that more buyers or sellers dominate the previous trend.

I know I can do better in terms of explaining this but I simply had to place on record my disagreement that there has to be a catalyst. A catalyst is what so called experts assign to a reversal after the event, it is amazing that none of them seem to anticipate the catalyst in advance although one is able to make probabilistic forecasts on future direction.