Fundamental Analysis is the study of the goods in which the market deals. (production, capacity, managerial competence, sales, costs, bookings, book value, …).

Technical Analysis is the study of the trading action of the market (price, volume, transaction characteristics, …). Technical analysts believe that the market price reflects: the hopes, fears, guesses, and moods, (factors which defy analysis) and the foresight and information of the most capable investors, providing an accurate discounted value of future events.

Technicians believe that prices move in trends which continue until the supply and demand relationship between buyers and sellers changes. These changes are detectable in the market action in the form of patterns, formations, or levels. The experienced student of these patterns gains a fallible but definite edge with usage.

Technicians believe that history repeats itself. As an example review the monthly "S&P400 forecasting model" for the 1980's.

Over 100 months this model tracked the actual S&P400 performance with a regression Rsquared = .963. This means that over 96% of the monthly movement in the S&P400, including the October 1987 crash, could be explained by the "model".

The "model" broke down in May 1988, so actual data is posted only up to that point. The model uses actual 1920's data normalized to align with the 1980's.