..Then you don't really have a clue what you're talking about, do you?
I think I do. I have been researching this topic for quite some time and I (believe) have acquired some knowledge...
The thing is that there are plenty of evidences (so many papers around) that those patterns are present. However, there is always some curve fitting. This is very well known for all research papers...Example:
You are a researcher and you are looking for those patterns. You have researched (lets say) 10,000 different patterns and you have found only (lets say) 15 of them that have outperformed the market. Most of them have underperformed the market. So basically if you implement ALL of them the result would be that you have actually under-performed the market! So, what do you do?? Do you quit the research?? You don't present your findings??? Of course not!!! You spent 2,000 hours in that project. You sacrificed your family life for this project...So what do you do??? You make the assumption that beforehand(as if you knew about them)you implement ONLY those 15 strategies...The result?? You have actually outperformed the market in such a way that violates the EMH. To my mind (and to may others') those results are worth our attention.
Now the fact that those patterns do exist is quite interesting. Some of them are persistent as well. The thing is that you should be aware of them beforehand! However, there are ways to surpass this obstacle. As mentioned those Hedge Funds have the ability to identify those patterns and when they occur they have the ability to implement ONLY those strategies and not the ones that are not profitable...In addition, they have the ability to identify whether those strategies may stop working and stop implementing them.However, you, as a retail trader, have limited abilities in identifying those patterns and being able to stop the winning strategies when they stop being profitable. In the context of the whole universe (10, 000 strategies) those 15 strategies are not statistically significant at all. They may have occurred purely by chance alone!!! And in order to identify those strategies you should try all of them.However, in the context of implementing ONLY those 15 strategies the results are more than striking!!! You see the curve-fitting???However, whether YOU can exploit them is another issue...This ,however, doesn't mean that somebody else cannot exploit them...
Well, this issue is very well known to all of those researchers. Basically, this is an inherent problem of Economics and Finance. Those sciences are social and not experimental as the exact sciences. This means you cannot generate new data as with the exact sciences. By this I mean, if you want to test something is physics, it is quite straightforward. You have your underlying assumptions and you have a controlled environment in which to test your hypothesis. You can actually generate new data (the controlled environment which you can alter and test your hypothesis under different conditions). However, you can't do that with Economics and Finance. You can't generate the time series of Dow Jones for the next 5 years (and test your hypothesis under different market conditions)!!! So basically you look into the past and try to identify those patterns. In order to test whether those patterns are important you can't test them under different future conditions. So what do you do??? You test them using the past data. When using this method (there is not any other) there is always the issue that purely by chance some of your results will not be applicable in the future. Some of them occurred purely by luck alone.
This is the issue with Economics and Finance. You DON'T have a straight answer (a yes or no) to any possible question as compared with Physics and there is always curve fitting. IF you are asked whether the kinetic power of a ball ,(weighting 1 kg)falling from one meter height is going to be (lets say) 10,000 joules or not you can know the answer. You can create the environment and test it (and you can repeat this experiment for thousand of times) an you get an answer (yes or not). However, with Finance you CANNOT do that. You can't generate the time series of Dow Jones for the next 5 years and then test your strategies and see whether they work or not beforehand.
You can only know that afterwards!!! The same applies for any Economic policy. Do you know whether it is going to work beforehand? Of course not. The thing is that there is a chance that this will work based on the fact that it worked in the past. However, there is not a guarantee simply because of the aforementioned facts. This is the argument that many have used in order to scrutinize Economic policies. The fact that they worked in the past doesn't mean that they will definitely work in the future. The thing is that purely by chance they may have worked in the past but are not applicable in the future (see Keynesian Economic policy ). .So to your original question. Whether those patterns exist and are exploitable there is not a definite answer. You can't say a yes or not. The thing is that they may not work for YOU but they may work for some OTHERS.
I hope that I have given you some explanations...You see, after all, it is not that straightforward....