To determine what worldwide stock markets will do as far as fluctuations in price, involves first determining which school of thought will be utilized regarding the analysis of companies and the investment prospects they pursue. The most widely used school of thought which has proven reliable over multiple decades is the school of fundamental analysis.

Fundamental analysis views not only the financial opportunities of a company, but also the likelihood of accomplishing these goals in respect to their competitors. Technical analysis, on the other hand, has been successful in use, but not very structured or scientific. Thus, the question again arises, what is the connection between stocks and technical analysis?

Simply put, technical analysis studies past trends in the market. These trends are then used to help figure out what a future of a stock's price may be. However, this entire question with regard to the connection between stocks and technical analysis is still unanswered. What allows people to think that the price of stocks can be predicted by just looking at graphs and chart? Doesn't the companies overall condition and its financial outlook help in determining or predicting stock prices?

Some of this stems from technical analysis being used by market analysts who can downgrade stock or anticipate higher earnings. Trading stock is influenced not only by the markets daily swings or isolated events, but actually how markets move with time and the fallout from some of these events are cumulative, therefore experienced over time periods.

As a result, technical analysis utilizes tons of data including old stock quotes, trading volume charts, and a host of other data, to develop charts and graphs that work to determine exactly how long the impact of a move in a company will persist and impact the stock market trading of a particular issue.

In many cases, a side by side comparison of a fundamental analysis and a technical analysis of the same stock market issue have yielded results in which the technical analysis has been more able to predict the short term ebbs and flows of a particular company. However, the fundamental analysis works on a longer term basis, and so the technical analyst has earned a reputation of being a \"short\" predictor rather than a \"long\" predictor in the markets.

Technical analysis is much more difficult to explain to the layperson due to the incessantly large amount of jargon involved, much of it to describe shapes in graphs and trend lines that exist. An elbow, or a shoulder, or a host of other terms can all be used to describe the same trend in a graph (in this case, a level market, followed by a steep drop, and another leveling off) which can confuse and put off the typical investor from investing in a company.

In conclusion, the question still remains, \"What's the connection between technical analysis and stocks?\", how is it determined and on what basis? How can these tools be used daily and made easier to comprehend. Although, technical analysis is not as accurate and can be very subjective, it has been successful so it makes it hard to dispute that it is still a viable tool used in market analysis.