How does the weak form of EMH define market efficiency?

The weak form of the Efficient Market Hypothesis (EMH) asserts that all available information in the market is reflected in stock prices based solely on past market prices. This means that technical analysis, which relies on historical data to predict future stock price movements, would not provide an advantage in earning excess returns. The fundamental assumption underlying the weak form is that price movements are driven purely by historical information, making it impossible to consistently outperform the market just by analyzing past prices.

In contrast to the weak form, the semi-strong form incorporates all publicly available information—including news and financial statements—while the strong form considers all information, both public and private (insider information). Thus, the weak form distinctly focuses on the past market data, emphasizing its role in determining current stock prices.