2. The Basis: DOW THEORY
Charles H. DowCharles H. Dow (1884)(1884)
TheThe grand-daddy of technicalgrand-daddy of technical
analysisanalysis::
1. The1. The averages discount everythingaverages discount everything
2. The2. The market has three trendsmarket has three trends:: TWRTWR
--
primary/majorprimary/major........................."tide"........................."tide"
--
secondary/intermediatesecondary/intermediate......."waves"......."waves"
-- minor/nearminor/near
termterm....................."ripples"....................."ripples"
3. Major3. Major trends have three phasestrends have three phases
- accumulation- accumulation
- trend-following- trend-following
- speculation- speculation
4. The4. The averages must confirm eachaverages must confirm each
ArifinLatif/Mar95