Dow Theory

A theory of market analysis based on the performance of the Dow Jones Industrial and Transportation stock price averages. The theory states that the market is in a basic upward trend if one of these averages advances above a previous important high, accompanied or followed by a similar advance in the other average. When the averages both dip below previous important lows, this is regarded as a confirmation of a downward trend.

Updated on: 24/04/2023