Large daily moves often become easier to interpret when they are decomposed into information, positioning and mechanical flow. Those three mechanisms form a useful diagnostic framework, but the available material does not support the claim that they explain exactly 80% of daily price movement. The percentage has therefore been removed; the framework remains. Each category should be tested against an observable proxy and an alternative explanation rather than imposed after the move.
After years of studying intraday data across equities, indices, and commodities, one pattern keeps resurfacing:
the majority of daily price movement comes from the same three forces, repeating under different headlines.
Context & Intuition
Spend enough years in front of a trading screen and you start to feel gaslit.
Prices whip around. Narratives shift by the hour. Everyone seems to have a reason after the move.
It’s tempting to believe markets are chaotic—an emotional casino driven by vibes, tweets, and the occasional big macro economic shock.
But if you zoom out, the whole thing looks different.
Modern markets are not dominated by discretionary opinions. They are shaped by mandated behavior. Trillions sit in passive vehicles. Institutions operate under benchmarks, volatility targets, and capital constraints. Options volume has exploded, compressing time and amplifying feedback loops. Retail traders bring extra noise, but the real force comes from the structure of the system.
Think of it like traffic. Accidents make headlines. But congestion usually comes from the same places: merges, bottlenecks, and rush-hour flows. Markets behave the same way. The drama is visible; the plumbing is not.
After years working across tick-level data, volatility regimes, and cross-asset behavior, one pattern keeps repeating:
Most daily market movement can be explained by a few structural forces at work, day in and day out.