I've never looked into "Dow Theory" but here it i
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Posted On: 08/22/2017 8:34:39 AM
Re: ChannelTrader #50891
I've never looked into "Dow Theory"
but here it is.
1. Both the Dow Jones Industrial Average and the Dow Jones Transportation Average must undergo a “significant” decline after hitting new highs — “significant” both in terms of time and magnitude.
2. In their subsequent “significant” rally following the decline referred to in step No. 1, either one or both of these Dow averages must fall to surpass their highs.
3. Both averages must then fall below their lows registered at the bottom of the decline referred to in step No. 1.
Notice that I put “significant” in quotes. That’s because there isn’t universal agreement on what magnitude of market moves is necessary to satisfy. Some Dow Theorists argue that, per Hamilton’s original indications, a move under the first step isn’t “significant” unless it lasts at least three weeks and corrects at least one-third of its previous move. On this interpretation, the market hasn’t come close to that first step.
but here it is.
1. Both the Dow Jones Industrial Average and the Dow Jones Transportation Average must undergo a “significant” decline after hitting new highs — “significant” both in terms of time and magnitude.
2. In their subsequent “significant” rally following the decline referred to in step No. 1, either one or both of these Dow averages must fall to surpass their highs.
3. Both averages must then fall below their lows registered at the bottom of the decline referred to in step No. 1.
Notice that I put “significant” in quotes. That’s because there isn’t universal agreement on what magnitude of market moves is necessary to satisfy. Some Dow Theorists argue that, per Hamilton’s original indications, a move under the first step isn’t “significant” unless it lasts at least three weeks and corrects at least one-third of its previous move. On this interpretation, the market hasn’t come close to that first step.
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