No! The whole point of the Pavlov's dog theory is that the behaviour continues long after the underlying cause has gone. It won't continue for ever, but for longer than it is efficient. For example, in the past, when Modiji announced an 8pm speech, there were major market-moving announcements. A market that behaved like Pavlov's dog will get volatile every time an 8pm speech is announced. An efficient market will take into account that in the recent past, the 8pm speeches have been duds. It will also take all other available information into account in an instant before settling on a price level. You cannot bet against an efficient market, but you can against a market that behaves like Pavlov's dog.
No! The whole point of the Pavlov's dog theory is that the behaviour continues long after the underlying cause has gone. It won't continue for ever, but for longer than it is efficient. For example, in the past, when Modiji announced an 8pm speech, there were major market-moving announcements. A market that behaved like Pavlov's dog will get volatile every time an 8pm speech is announced. An efficient market will take into account that in the recent past, the 8pm speeches have been duds. It will also take all other available information into account in an instant before settling on a price level. You cannot bet against an efficient market, but you can against a market that behaves like Pavlov's dog.
thanks for clarifying. i guess i got some insight and then got tied up in my own knots while writing!