<p>Continuing the discussion <a href="https://economics.stackexchange.com/questions/51675/macroeconomics-and-microeconomics">Macroeconomics and microeconomics</a> my second question is can we say Fundamental analysis(<a href="https://en.wikipedia.org/wiki/Fundamental_analysis" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/Fundamental_analysis</a>) is bottom up approach and technical analysis(<a href="https://en.wikipedia.org/wiki/Technical_analysis" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/Technical_analysis</a>) is top down approach in trading?
IS <strong>price</strong> of a stock the macroeconomic variable and the cashflow statements
PE ratio, Quarterly results, Earning per share, price to book ratio, ROE etc ... of that very company are microeconomic variables ?</p>
<p>How can we reconcile the emergent nature of stock prices, which arise from complex interactions between microeconomic fundamentals (like company performance) and macroeconomic factors (such as inflation, interest rates, and global trends), with the predictability of financial markets, given the potential for market psychology, investor behavior, and external shocks to distort intrinsic value and create volatility? Any frameworks of economics can help me out ?</p>

CC BY-SA 4.0
2024-12-18T07:45:12.783Z
I don't think either one is really part of economics.
Michael Greinecker
CC BY-SA 4.0
2024-12-20T15:47:11.163Z
I’m voting to close this question because it seems better suited for [Quantitative Finance](https://quant.stackexchange.com/).
Herr K.
<microeconomics><macroeconomics><trading>
technical vs fundamental analysis . Which is top down approach and which is bottom up approach
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# technical vs fundamental analysis . Which is top down approach and which is bottom up approach

(Asked by: username_0 on 2024-12-18)

Continuing the discussion [Macroeconomics and microeconomics](https://economics.stackexchange.com/questions/51675/macroeconomics-and-microeconomics) my second question is can we say Fundamental analysis(<https://en.wikipedia.org/wiki/Fundamental_analysis>) is bottom up approach and technical analysis(<https://en.wikipedia.org/wiki/Technical_analysis>) is top down approach in trading?
IS **price** of a stock the macroeconomic variable and the cashflow statements
PE ratio, Quarterly results, Earning per share, price to book ratio, ROE etc ... of that very company are microeconomic variables ?

How can we reconcile the emergent nature of stock prices, which arise from complex interactions between microeconomic fundamentals (like company performance) and macroeconomic factors (such as inflation, interest rates, and global trends), with the predictability of financial markets, given the potential for market psychology, investor behavior, and external shocks to distort intrinsic value and create volatility? Any frameworks of economics can help me out ?

**Tags:** microeconomics, macroeconomics, trading
> **Comments:**
> **username_1**: I don't think either one is really part of economics.  
> **username_2**: I’m voting to close this question because it seems better suited for [Quantitative Finance](https://quant.stackexchange.com/).  

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