The Efficient Market Hypothesis asserts that at any time the price of
a stock on a stock market reflects all information about that stock
and that market, including future expectations. That, in effect,
"Mr. Market" knows everything before you do and in much more detail.
Because of this, the theory requires that
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At any given time, the market correctly prices all stocks.
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observable information about the stock or the stock market arrives randomly.
Therefore, a stock cannot be overpriced or underpriced for a long
enough period of time to profit therefrom, and as a result there is
little to be gained by any type of technical analysis or
fundamental analysis.
See also: efficient market hypothesis rebuttal
Thanks to Steven B. Achelis