A Review of the Efficient Markets Hypothesis & The Elliot Wave Analysis: An empirical Investigation

Keshava, Gaurav (2007) A Review of the Efficient Markets Hypothesis & The Elliot Wave Analysis: An empirical Investigation. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

SUMMARY

In his presentation of the Efficient Market Eugene F. Fama wished to create a coherent picture of the main lines of the work on efficient markets, along with an accurate picture of the current state of the arts. The objective of this dissertation is to present a 360 degree perspective of Efficient Markets, whilst using Fama's original work as a skeletal frame.

This dissertation has been divided into two parts. Part I is reserved for an in-depth qualitative discussion of Efficient Markets. The Efficiency of Markets is assumed throughout the discussion, and though any attack on this established fact would be futile, an attempt has been made to highlight and discuss the most notable cases of Inefficiency. Based on the arguments against efficiency, we also look at further implications of Efficient Markets on Investment Professionals, the impact Market Efficiency had on them and how they use it in today's world for their own benefit.

Based on the fact that Markets are Efficient, we move onto Part II. Here a new concept is introduced which may seem either brilliant or ludicrous. The Elliot Wave Analysis is a technical trend following tool that has been termed as one of the few challenges to Market Efficiency, along with the Dow Theory. This obscure and long forgotten theory is based on human psychology and (to some extent) the chaos theory, which states that there is a pattern within randomness.

Part II features an exhaustive review of this concept along with the main characteristics underlying this theory. After an introduction to the basic tenants of this theory, the author tries to create a model based on the Elliot Wave. Once a Model has been constructed, first a naive test is carried out employing the use of Microsoft Excel, and then a more formal approach is implemented using the statistical prowess of SPSS.

Item Type: Dissertation (University of Nottingham only)
Keywords: Efficient Market Hypothesis, Elliot Wave Analysis, Empirical Investigation
Depositing User: EP, Services
Date Deposited: 06 Mar 2008
Last Modified: 25 Oct 2016 19:11
URI: http://eprints.nottingham.ac.uk/id/eprint/21226

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