Wall Street is now starting to rally higher on bad economic news, pricing in a new round of monetary stimulus from the Fed. Unfortunately this is being done on thin volumes by cynical speculators, setting up possibly hazardous market conditions.
“Some economists, when thinking about long memory, are concerned that it undercuts the Efficient Market Hypothesis that prices fully reflect all relevant information; that the random walk is the best metaphor to describe such markets; and that you cannot beat such an unpredictable market. Well, the Efficient Market Hypothesis is no more than that, a hypothesis. Many a grand theory has died under the onslaught of real data.” Benoît B. Mandelbrot