When many people in the financial world refer to technical analysis, it is often in direct contrast to the other major school of market analysis, fundamental analysis. The contrast between the two is clear and distinct.
Fundamental analysis focuses on what the underlying reasons may be for market movement. In the stock market, this would consist of news and financial information (e.g. earning) that are directly associated with a particular publicly traded company. In the futures market, it would consist of substantive market information regarding a sepcific commodity (e.g. wheat or oil) or financial market/index (e.g S&P 500). In the foreign exchange, or currency, market, fundemental analysis would be primarily concerned with international economies, central bank policy, interest rates, and inflation.
Fundamental analysis stands in stark contrast to the world of technical analysis. Instead of concerning ifself with the underlying resons for price movement, technical analysis focuses on the price movement itself and how mass human behavior is manifested in price action. Technical analysts believe that all fundamental information and econimic factors that can cause price movement are already reflected in price action. Therefore, technical analysis purists generally avoid looking at earnings or crop reports or international econimic coditions. Instead, the two primary tools of price and volume as depicted on a financial chart are sufficient for most analysts of the technical persuasion. Of these two tools, price is univerally more important.
There is another way Chen, & James describe the distinction between fundamental analysis and technical analysis that you can find it in page 15 of the book
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