The stock markets are said to rise and fall based on data from a variety of reports. Have there been any studies on the effects of emotion and people’s general “feelings” on the markets and how the markets are affected by them? It seems that at various times the market does not move based on data – either in whole or in part. It moves, rather, based on well, I don’t know.

The different papers and websites seem to substantiate a rise, fall, or stagnation on what seem to be non-factor reasons. An analogy of this would be a typical write-up on Yahoo Finance which writes that while a recent GDP report gives bad news for stocks, the markets continue to push into record territory because there are rumors that company ABC might be consider acquiring company XYZ. It’s like they are just searching for reasons to explain why the market does what it does.

I am sure there is a lot that goes on behind the scenes and in the trenches that many of us don’t come across on a regular basis or don’t have access to. Who really moves the markets? Is it the institutional investors such as mutual funds and investment banks, individual investors, a combination of both, or something else? Is there any resource out there that breaks down the volume of trades on a given day based on who traded? Example: 2 million shares traded today, 70% by institutional investors, 25% by individuals, and 5% by others?