A key result of this analysis is that there's an element of feedback. If you're the only investor in the world who's using this strategy, it may work. But the larger the proportion of investors who do this, the more locally unstable the market will become. It's a far cry from the "perfect, self-correcting market", which we can think of as the zeroth order long-term behaviour. But feedback effects are not sufficiently local that they cannot have destructive effects over a multi-year timescale.