I should also clarify that I'm talking about gains relative to the overall market. When the entire market is moving up due to the addition on money from external sources, it's easy for individual traders to see patterns that look like successful strategies, but aren't in fact.
Imagine 100 gamblers playing slot machines that start out at 99.5% payout, then as they continue to play the operators gradually increase the payout past 100% to 110%, then lower it back down to 100% and finally back to where it started.
That's what the infusion of the Baby Boomer's 401k money did to the market, and also to the perceptions of the people involved in it.
Every strategy that appeared to work from the early 1980s until the mid 2000s only did so because the market had been temporarily turned into a positive sum game by tax policy and other regulatory manipulation.
It was never real or sustainable.
Another fair point about the practical side of trading for perhaps a majority of market participants, but we're discussing whether profit is possible
in principle.
Obviously, serious investigations into market factors are taking your objection into account, either by comparing the factor's results against the market baseline, or by investigating time scales where the larger market direction doesn't play a role.
I really invite you to take another look at the Harvey paper,
especially because it is extremely critical of what they call a "zoo of new factors", the majority of which are likely just statistical artifacts. The flip side is however that the factors that
do survive the additional scrutiny are not easy to dismiss.
So, no objection if someone is skeptical whether Elliot Wave this or MACD that is a viable long-term strategy. But the notion that markets are (more or less) unconditionally adhering to weak-form efficiency is hard to sustain in the face of the evidence.
