From Kahneman and Tversky’s “Variants of uncertainty,”

Evidently, an observer can be prepared, or “primed” for one event while consciously expecting another - and can show physiological evidence of surprise at the occurence of an event that was consciously predicted.

This seems to be what happens to otherwise intelligent gamblers and speculators and even precocious children at Christmas time (“Oh, I’m certain I won’t get a puppy/Nintendo/atomic-EZ-bake-oven…. indeed, I did not get a puppy/Nintendo/atomic-EZ-bake-oven… what??? I didn’t get a puppy/Nintendo/atomic-EZ-bake-oven???”

It would seem that a neurological component associated with hope is written in the same “markup” as expectation, and despite our best conscious efforts we can’t shake the feeling of loss even when we expected the outcome. I’d imagine that a great many moment of large market movement, especially down, were due to manifestations of bias. Under a better label, though, like “animal spirits”.