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"Don't trade when there aren't clear opportunities" Jesse Livermore "The only way to "get better at trading" is to practice dealing with losses, with money, with your real trading system "Rob Booker "There are old traders and there are bold traders, but there are very few old, bold traders." Ed Seykota "Don't think about what the market's going to do; you have absolutely no control over that. Think about what you're going to do if it gets there"Bill Eckhardt

Friday, August 19, 2016

DOW THEORY


  • Dow theory was formulated from a series of Wall Street Journal editorials which were authored by Charles H. Dow from 1900 until the time of his death in 1902. These editorials reflected Dow's beliefs regarding how the stock market behaved and how the market could be used to measure the health of the business environment.
  • The theory states: Market Indexes Must Confirm Each other:
  •  In other words, a major reversal from a bull or bear market cannot be signaled unless both indexes (generally the Dow Industrial and Transports Averages) are in agreement.  Currently, THEY ARE DIVERGING.
  • However, if  The DOW JONES INDUSTRIAL AVERAGE follow the Transports Average and also volatility index will be increased (Fear Index) the result of the above will be a major downturn in the market. 
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