What is the logic behind "Technical Analysis is like reading tea leaves"?

[vinoveri]

Re: What is the logic behind "Technical Analysis is like reading tea leaves"?

There's a decent write-up here on Portfolion.com:

Incidentally, academic studies of technical analysis have yielded mixed results: Many have found that its techniques can provide market-beating results, but they’ve also shown that once the added risk of using technical analysis is accounted for, the gains are wiped away. And other studies have shown that even if you don’t account for the additional risk, gains offered by technical trading techniques have largely disappeared since the 1990s.

So if Technical Analysis trading is suspect or a crap shoot, and as we see now that fundamental analysis is also coming up short (note past 7 month gains in equities absent 'fundamentals'), what's left to base an investment/trading decision .... ?

Maybe it's more simple now ... "Bernanke analysis" or a simple metric of quantitative easing/printing

[FRED]

Re: What is the logic behind "Technical Analysis is like reading tea leaves"?

Another question I've been wondering about: So there are these Technical Analysis people who make good arguments about the value of T.A. and how it really gives you an advantage trading/investing. I've read a lot of these arguments at this point and I think I get the gist of it.

But I've also read some pretty respectable people who say that at the end of the day T.A. is really "tea leaf reading" and the market is just too unpredictable and that no real advantage over the market average can be gained with T.A.

However I have not heard any kind of detailed logical argument from the anti- T.A. people why their view should prevail. Just broad declarations that 'it is so'.

Can anyone here explain the anti- T.A. position clearly?

Thanks!

There's a decent write-up here on Portfolion.com:

Incidentally, academic studies of technical analysis have yielded mixed results: Many have found that its techniques can provide market-beating results, but they’ve also shown that once the added risk of using technical analysis is accounted for, the gains are wiped away. And other studies have shown that even if you don’t account for the additional risk, gains offered by technical trading techniques have largely disappeared since the 1990s.

[pianodoctor]

Another question I've been wondering about: So there are these Technical Analysis people who make good arguments about the value of T.A. and how it really gives you an advantage trading/investing. I've read a lot of these arguments at this point and I think I get the gist of it.

But I've also read some pretty respectable people who say that at the end of the day T.A. is really "tea leaf reading" and the market is just too unpredictable and that no real advantage over the market average can be gained with T.A.

However I have not heard any kind of detailed logical argument from the anti- T.A. people why their view should prevail. Just broad declarations that 'it is so'.

Can anyone here explain the anti- T.A. position clearly?

Thanks!