  We propose a simple stochastic model of market behavior. Dividing market
participants into two groups: trend-followers and fundamentalists, we derive
the general form of a stochastic equation of market dynamics. The model has two
characteristic time scales: the time of changes of market environment and the
characteristic time of news flow. Price behavior in the most general case is
driven by three stochastic processes, attributed to trend-followers,
fundamentalists, and news flow, respectively. The model demonstrates the wide
range of peculiarities which are typical in real markets: multiscale behavior,
clustered volatility, weak correlations between the price changes on successive
trading days, etc.
