Why is a market that is weak-form efficient in direct opposition to technical analysis?

Answer 1

A market that is weak-form efficient suggests that all past prices and trading volumes are already reflected in current stock prices, meaning that historical price data cannot be used to predict future price movements. This fundamentally opposes technical analysis, which relies on historical price patterns and trends to forecast future prices. If a market is truly weak-form efficient, then technical analysis would be ineffective, as any patterns or signals derived from past data would already be incorporated into the market price. Therefore, the principles of weak-form efficiency undermine the validity of technical analysis as a predictive tool.