You watch the market that is, the course of prices as recorded by the tape– with one object: to determine the direction– that is, the price tendency. Prices, we know, will move either up or down according to the resistance they encounter. For purposes of easy explanation we will say that prices, like everything else, move along the line of least resistance. They will do whatever comes easiest, therefore they will go up if there is less resistance to an advance than to a decline; and vice versa.
Nobody should be puzzled as to whether a market is a bull market or a bear market after it fairly starts. The trend is evident to a man who has an open mind and reasonably clear sight, for it is never wise for a speculator to fit his facts to his theories. Such a man will, or ought to, know whether it is a bull or a bear market, and if he knows that, he knows whether to buy or sell. It is therefore at the very inception of the movement that a men needs to know whether to buy or sell.
– Jesse Livermore, Reminiscences of a Stock Operator