'Technical Analysis = Behavioral Finance' - An interesting perspective!

The link below leads to an interesting article by Cam Hui of Qwest Investment Management - It asks 'What is technical analysis?', explores ‘Whether it works?’, and addresses some of those criticisms which leads to detractors labeling it as in similar categories such as astrology and voodoo?

In the article Cam refers to research by some leading figures in the field of Behavioural Finance, including the brilliant Andrew Lo, to support his claims that Technical Analysis works. Cam goes on to rather boldly claim that 'Technical analysis amounts to Behavioural Finance' – Whilst I personally would not go as far as that, I can see where Cam is coming from: A view I have long held is that ‘behavioural factors’, which have formed some of the theories behind Behavioural Finance, help in formulating explanations which validate Technical Analysis. – In fact, at a talk I gave to the London branch of the ‘Society of Technical Analysts’ earlier this year, I suggested that had ‘technical analysis’ never existed, then Behavioural Finance would probably have created it.

The link to the article is as follows: http://qwestfunds.com/publications/newsletters_pdf/newsletter_may_2013.pdf

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