This begs the question for the trader: Is the Market Wrong at Times?
Well, the answer is an easy one. The market is always right, and if you trade why you think is right versus what the market has deemed to be right you are in for an unprofitable ride.
Mendelbrot had the problem pegged long ago, chaos and randomness…there has been no real explanations because a degree of randomness exists in the market and it is difficult to account for irrational behavior, or market noise.