1- Technical analysis pertains to the language of the market itself.
2 -Technical analysis is particularly helpful in the detection of buying and selling pressures before there is a widely seen fundamental reason for buying or selling.
3- Often times the fundamental reasons for a stock's move are not recognized until later, but the technical reasons are apparent earlier in the move. Technical analysis often makes the illogical suddenly logical.
4- Technical analysis anticipates or precedes market fundamentals.
5- If this is so, there must be technical factors which have better leading tendencies than others.
6- Hence, volume is more important than price itself in considering future price movement. In other words, Volume has a strong tendency to precede price, and Volume forecasts price better than fundamentals.
These thoughts opened the door for Granville's developement of OBV.
(source: Granville's New Key to Stock Market Profits by Joseph E. Granville.)
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