[ QUOTE ]
For rigorous evidence that TA can work, here is a good place to start:
http://www.pupress.princeton.edu/sam.../lo/part1.html
eastbay
[/ QUOTE ]
To be honest, I couldn't understand the description of their test (I'm not a statistics major), so I can't comment on their proof.
But "Moreover, upon further investigation, we learned that over the past decade several investment firms--most notably, Morgan Stanley and D.E. Shaw--have been engaged in high-frequency equity trading strategies specifically designed to take advantage of the kind of patterns we uncovered in 1988. Previously known as "pairs trading" and now called "statistical arbitrage," these strategies have fared reasonably well until recently, and are now regarded as a very competitive and thin-margin business because of the proliferation of hedge funds engaged in these activities. "
Pair trades aren't TA, so that quote doesn't support it.
In general I disagree with the premise of "A Random Walk Down Wall Street", in that markets are always efficient. I think even Markiel has conceded that markets are just generally efficient, but not always.
But I believe the way to beat the market is by taking advantage of arbitrage opportunities and value discrepencies. I'm very skeptical that historical price data (TA) has any value in predicting future prices.