Category: Dow Theory
The analysis published under this category are as follows.
Friday, May 03, 2019
Stock Market Investing Dow Theory Overview. / Stock-Markets / Dow Theory
By: Christopher_Quigley
Applying Dow Theory To Investment Practice.
I first came across Dow Theory in 1989 when I lived in Belmont, San Mateo County, California. I thought its creators Charles Dow and William Hamilton had unique insight into stock market behaviour. Accordingly, for over ten years I developed a course incorporating their fascinating insights and have been solidly teaching their market philosophy for over 12 years; writing my first published on the topic in 2007.
One of the most difficult tasks I have encountered teaching this subject is how to prevent students
Thursday, September 03, 2015
Dow Theory Stock Market Sell Signal Examined / Stock-Markets / Dow Theory
By: Brian_Bloom
The article below argues that the Dow will rise after its current “correction” because it rose following the two previous corrections. But this time around both Industrials and Transports have fallen to lower lows. On those previous two occasions this did not happen.
Monday, August 24, 2015
Dow Theory Stock Market Sell Signal Reconfirmed / Stock-Markets / Dow Theory
By: Christopher_Quigley
If ever there was proof of the continued relevance of Dow Theory, the price action of the last 3 days provides all the evidence required.
Today’s market collapse at the open took out the October lows in both the Dow Transports and the Dow Industrials. This move to ever lower lows reconfirms the initial Dow Theory Sell signal triggered earlier this year.
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Friday, August 21, 2015
Waiting for Dow Theory Stock Market Sell Signal / Stock-Markets / Dow Theory
By: Gary_Savage
Most analysts don't understand where the last secondary correction occurred. They assume that the averages need to drop below the Oct Low to produce a Dow Theory bearish trend change.
Actually the last secondary correction bottomed in July. The industrials have already broken those lows and if the transports also break below that level it will generate a Dow Theory sell signal.
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Monday, October 20, 2014
Stock Market Dow Theory Update / Stock-Markets / Dow Theory
By: Tim_Wood
From my seat and in light of the price action this past week, I truly find the lack of understanding surrounding Dow Theory amusing. I also find the content from most any article on this subject to be inaccurate and/or typically misleading. Such erroneous articles result from the misunderstandings and/or the lack of quality study of Dow Theory, which in turn makes such articles dangerous to those who read them, as well as being a discredit to Dow Theory. In my experience, virtually 99.9% of all articles written on the subject of Dow Theory are wrong. I think this is because of the scarcity of the original writings by our Dow Theory Founding Fathers and again, the lack of quality research.
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Wednesday, April 09, 2014
The Stock Market and Dow Theory / Stock-Markets / Dow Theory
By: Tim_Wood
I have recently received a number of e-mails, phone calls and texts asking if we have recently seen a “Dow Theory Buy Signal.” As I understand it, this question was prompted as a result of the Industrials and the Transports having moved to new intraday highs last week. I want to explain each and every issue with this alleged “Dow Theory Buy Signal.” Then, I will walk you through the Dow Theory events that have followed in the wake of the 2009 low and where we are now in accordance with Dow Theory.
Thursday, October 18, 2012
U.S. Presidential Election Doesn’t Matter to the Stock Market / Stock-Markets / Dow Theory
By: Tim_Wood
As we have moved toward the election I have continued to hear talk that one candidate would be better for the market than the other. I have also heard that the current administration is responsible for the market advance since 2009. To say this and/or that this administration would therefore be good for the future of the market is like saying that we have had more sunny days since 2009 and that if the current administration is reelected then we will have more sunny days over the next 4 years.
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Wednesday, June 13, 2012
Stock Market Dow Theory Update / Stock-Markets / Dow Theory
By: Tim_Wood
As a result, of the decline below the April 10th lows, many articles on Dow theory surfaced saying that a so-called Dow theory sell signal was triggered. This is not exactly correct. In fact, most articles written on Dow theory are erroneous. Reason being, most of the people writing these articles have not read the original writings by Charles H. Dow, William Peter Hamilton and particularly Robert Rhea. As a result, they simply do not understand Dow theory.
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Thursday, February 23, 2012
Stock Market New Dow High, Is Dow Theory No Longer Useful? / Stock-Markets / Dow Theory
By: Tim_Wood
The price action earlier this month carried the Dow Jones Industrial Average above its May closing high. This has occurred in the wake of the so-called "Dow theory sell signal" from back in August when the averages closed below their June lows. How could this be? Is Dow theory no longer valid? Is Dow theory no longer useful? What went wrong?
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Sunday, August 28, 2011
Stocks Primary Bear Market Dow Theory Update / Stock-Markets / Dow Theory
By: Tim_Wood
In accordance with Dow theory, once the trend is confirmed, that trend must be considered intact until it is authoritatively reversed. In the case of an up market, a move below the previous secondary low points are required in order to authoritatively reverse the uptrend and confirm a new downturn. On August 4, 2011 both the Industrials and the Transports closed below their previous secondary low points. In doing so, the bullish primary trend that began at the March 2009 low was reversed with a bearish primary trend change in accordance with classical Dow theory.
Sunday, June 19, 2011
Stock Market Dow Theory Update / Stock-Markets / Dow Theory
By: Tim_Wood
According to Dow theory, once the primary trend is established, that trend must be considered intact until it is "authoritatively" reversed, which requires a joint move by the Industrials and the Transports back above/below their previous secondary high/low points. On March 9, 2009 the bear market phase I low was made. From that low point, the rally separating phase I from phase II began and on July 23, 2009 the bullish primary trend, in accordance to classical Dow theory and in association with the rally separating phase I from phase II, was confirmed. But, based on the longer-term work, this is expected to change and when it does, provided that the normal bull and bear market relationships still mean anything, the phase II decline will begin.
Saturday, July 24, 2010
No Dow Theory Stock Market Sell Signal / Stock-Markets / Dow Theory
By: Tim_Wood
On June 30th both the Industrials and the Transports closed below their June 7th lows. In doing so, anyone who had not already proclaimed a Dow theory “sell signal” seems to have done so at that time. I stated here in my last post, as well as in recent audio interviews, that I disagreed with anyone who has made such statements in regard to Dow theory. I have since received a number of questions asking me how so many people could be wrong about Dow theory and if my position has changed.
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Saturday, December 19, 2009
Stock Market Update / Stock-Markets / Dow Theory
By: Tim_Wood
The Dow theory bullish trend confirmation that occurred earlier this year remains intact. Cyclically, the higher degree low that began at the March low also still remains intact. Longer-term, I maintain, based on my data, that this is nonetheless a bear market rally. Once this rally has run its course the big surprise will be the Phase II decline and history shows us that Phase II declines are the most destructive. One reason for this is because with everyone believing that the bear market has ended, the Phase II decline takes everyone by surprise and as the realization begins to set in so does the panic.
Saturday, November 07, 2009
Stocks Secular Bear Market Dow Theory Update / Stock-Markets / Dow Theory
By: Tim_Wood
For some reason I have received numerous questions from readers about the big advance seen on November 3rd by the Transports. The basic question that I’m being asked is whether or not that single 5% advance, as compared to the Industrials, had any predictive value from a Dow theory perspective. The short answer is no. From an orthodox Dow theory perspective, the magnitude of a move by one average verses the other average is immaterial as long as both averages are in gear with each other. When I say in gear, I mean as long as both averages are operating above or below their previous secondary high or low point.
Tuesday, November 03, 2009
Possibility of Dow Stock Market Trend Change / Stock-Markets / Dow Theory
By: Christopher_Quigley
The two charts above of the Dow Transports and The Dow Industrials indicate that there is the possibility of a Dow Trend change. The trend altered on the transports over the last three days but is unconfirmed at the moment by the Industrial 30.
Tuesday, September 22, 2009
Wealthbuilder Quarterly Stock Market Brief and Stock Pick / Stock-Markets / Dow Theory
By: Christopher_Quigley
The monthly charts of the Dow Industrials and the Dow Transports are most revealing as they allow one immediately get a long term perspective on the current market situation. The Dow 30 hit an intraday high in October of 2007 touching 14,198. The Dow 20 got there in May 2008 hitting 5,536.
Tuesday, April 21, 2009
Trouble on the Dow Transportation Index? / Stock-Markets / Dow Theory
By: Marty_Chenard
In the past few days, I have done something I don't normally do. I have reported on the same thing for two days in a row, and will report on it again this morning ... about what is happening on the Transportation Index.
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Thursday, April 09, 2009
Postive Divergence a NON-Confirmation of Secular Stocks Bear Market / Stock-Markets / Dow Theory
By: Submissions
Steven Vincent writes: The DJTA did not confirm the DJIA move below 2002 lows.Much has been written about the Dow Theory confirmation of a continuation of a perceived Secular Bear Market. When the Dow Transports Index violated its November '08 lows it is held to have confirmed the INDU's move to new bear market low and thus validated the hypothesis that the markets had entered a Secular Bear Market and that the existing downtrend would continue.Read full article... Read full article...
Saturday, November 29, 2008
Important Aspects of Dow Theory Interpretation / Stock-Markets / Dow Theory
By: Tim_Wood
It's amazing how many people write articles and publish material on Dow theory. The sad thing is that the vast majority of the material I see is dead wrong. Recently, I was sent an older article that was published by a Certified Financial Analyst stating that a Dow theory “buy signal” was triggered on April 18, 2008. I was asked why that so-called signal failed and why my read on the Dow theory has proven correct. It's simple. When I read these articles I always see a common denominator in that it becomes immediately apparent that the author had never actually studied the original writings of Charles H. Dow, William Peter Hamilton or Robert Rhea. Read full article... Read full article...
Saturday, August 23, 2008
Is the Dow Jones Index and Dow Theory Irrelevant? / Stock-Markets / Dow Theory
By: Tim_Wood
This past week I was listening to an interview with an analyst who said that she had some 27 years of experience. In this interview she claimed that the Dow Jones Industrial Average was irrelevant. When I heard this I cringed. Now this is not to say that I don't see the argument behind this statement. Most people that make such statements are merely referring to the fact that the Dow Jones Industrial Average is comprised of only 30 stocks and that because of its narrow cross section of the market it is not reflective of the entire market. I have heard this argument countless times and hearing it once more really didn't surprise me. Read full article... Read full article...
Saturday, July 12, 2008
Stocks Bear Market Classical Dow Theory Proven Correct Once Again / Stock-Markets / Dow Theory
By: Tim_Wood
According to the founding fathers of Dow theory, which include Charles H. Dow, William Peter Hamilton and Robert Rhea, the single most important aspect of Dow theory is the price movement above and below previous secondary high and low points. The question is, what constitutes secondary high and low points? In all honesty, this is where the art of Dow theory comes into play. But, for those who have truly studied the original writings by Dow, Hamilton and Rhea this becomes fairly obvious with study. I can assure you that no book on technical analysis covers the Dow theory in enough detail to provide the reader a complete working knowledge of Dow theory. Read full article... Read full article...
Monday, June 16, 2008
Stock Market Dow Theory Non-confirmation Confusion Signals CAUTION / Stock-Markets / Dow Theory
By: Tim_Wood
Since July 2007 we have had an upside Dow theory non-confirmation, followed by a bearish primary trend change that was followed by a downside non-confirmation out of the January/March secondary lows. This was all then followed by a rally into the most recent secondary high points that carried the Transports to a new closing high on June 5, 2008 while the Industrials have lagged. As a result, another upside non-confirmation has been form. This can all be seen in the Dow theory chart below. Read full article... Read full article...
Saturday, April 19, 2008
Stocks Bull and Bear Market Relationships / Stock-Markets / Dow Theory
By: Tim_Wood
Obviously, the definitions of Bull and Bear markets differ from person to person. My definition is based on the works of the great Dow theorists, Charles H. Dow, William Peter Hamilton and Robert Rhea. As a result of my study of Dow theory combined with my study of cycles, which are not a part of Dow theory, I have drawn some very obvious conclusions about the nature of Bull and Bear markets. Read full article... Read full article...
Sunday, April 06, 2008
Stock Market Dow Theory Positive Developments But no Buy Signal / Stock-Markets / Dow Theory
By: Tim_Wood
In today's update I want to look at the market from a couple of different perspectives. Recently, I have heard it said that the Dow Theory is now giving a “Buy Signal.” This is not exactly true. In order to explain where we are from a Dow Theory perspective, I first have to explain where we have been. Read full article... Read full article...
Saturday, March 22, 2008
Stock Market Crosscurrents & Miracles / Stock-Markets / Dow Theory
By: Tim_Wood
With the close one week ago on March 14, 2008 , the equity markets were literally sitting on the edge of the abyss. The short-term T-bill rate had collapsed to just over 1% while the Discount rate was sitting at 3.5%. My Fed model suggested that another healthy cut was imminent and with the spread between the 3-month T-bill rate and the Discount rate at over 2% the Fed was forced to take action. On Sunday night, March 16, 2008, as the overseas markets opened they began to plummet, making it obvious that we were indeed sitting on the edge of the abyss. In a surprise, or should I say desperate, meeting on Sunday night the Fed cut .25% and on Monday the equity markets initially sold off sharply, but then recovered and closed the day marginally positive. On Tuesday the Fed cut the Discount rate another .75% and the Dow Jones Industrials closed up 420 points. Read full article... Read full article...
Saturday, March 08, 2008
Stocks Primary Bear Market- Dow Industrials vs Transports / Stock-Markets / Dow Theory
By: Tim_Wood
From a Dow theory perspective, the primary bearish trend confirmation that occurred on November 21, 2007 remains intact. According to Dow theory, it's the close that counts and up until March 7, 2008, the averages have both been operating within the boundaries of the previous two secondary high and low points. According to Dow theory such movement is of no forecasting value. In other words, once the trend is authoritatively established it must be considered to be intact until it is reversed and price movement between two secondary high and low points does not reverse the trend. Read full article... Read full article...
Sunday, February 24, 2008
Awaiting Signal for the Resumption of the Bearish Primary Stock Market Trend / Stock-Markets / Dow Theory
By: Tim_Wood
Since the rally out of the January lows began, I have heard it said on numerous occasions that the strength of the Transports somehow has bullish undertones and implies that the decline is over. The overall spirit of the comments I have been hearing has to do with the fact that the Transports have recovered more than the Industrials. I have also heard that some are saying we now have a Dow theory non-confirmation in place. None of these comments or interpretations are correct in regard to traditional Dow theory. Read full article... Read full article...
Saturday, January 12, 2008
Stocks Bear Market - Dow Theory Proves Correct! / Stock-Markets / Dow Theory
By: Tim_Wood
In spite of its criticisms, the Dow theory is once again proving correct. The one thing that the advance up out of the 2002 low has proven is that the single most important aspect of Dow theory is the concept of joint price confirmation above and below previous secondary high and low points. Basically, nothing else matters. In accordance with this basic concept, the primary trend first turned bullish on June 4, 2003. As the market advanced in the wake of mountains of liquidity the values did not make sense. Also, when looking at the phasing aspect of Dow theory it appeared that the rally out of the 2002 low was a giant secondary reaction and counter-trend advance. Read full article... Read full article...
Saturday, December 29, 2007
Current Stock Market Conditions from both a Dow Theory and a Cyclical Perspective / Stock-Markets / Dow Theory
By: Tim_Wood
As I'm sure you all know, I have been saying for quite some time that the equity markets have been operating within one of the longest 4-year cycles in stock market history. This is not some hollow or shallow opinion in which I'm letting the wish father the thought. In reality, I wish that I could tell you the 4-year cycle low is behind us, because that would certainly make my job much easier as that is what the majority of the public seem to want to believe. In any event, I do not align myself with popular opinion to make my job easier. Rather, my opinion is based strictly on statistical analysis and very specific indicators. As we move into 2008, the statistics nor the indicators have changed in regard to this matter. Therefore, my opinion continues to be that the 4-year cycle low still lies ahead. Read full article... Read full article...
Sunday, December 16, 2007
Dow Theory Stocks Primary Bear Market Confirmation / Stock-Markets / Dow Theory
By: Tim_Wood
The primary bear market confirmation that occurred on November 21 st when the Industrials confirmed the Transport's break below the August closing low remains in place in spite of the recent rally. In fact, the rally that began out of the November 26th low was anticipated and I stated before this rally began that it was going to cause many to question the integrity surrounding the November 21st Dow Theory primary bear market confirmation. That has definitely proven correct.
Robert Rhea, who was the leading Dow theorist in the late 1920's and 1930's stated: “Charles H. Dow never intended his theory of price movements to be construed as being a method whereby the royal road to riches could be found. While the principles laid down by him and developed by William Peter Hamilton may assist us in understanding something of security price trends, it would nevertheless be a fallacy to undertake any discussion of the subject without making the point very clear that no dependable method of beating the market has yet been discovered. Intelligent observation and study of the ever-recurring formations in the averages which Dow and Hamilton noted can, however, prove invaluable to both investors and speculators.”
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Sunday, December 02, 2007
The Dow Theory Potential Sell Signal Update / Stock-Markets / Dow Theory
By: Tim_Wood
In the previous November posting here I explained that in accordance to Dow's theory we had an important non-confirmation at play, which served as a warning that something was wrong. I also explained that we were then in what is known as a Sell Spot in anticipation of a Primary Trend change. On November 21, 2007 this Primary Trend change occurred. As a result, the “Stock Market Barometer,” as it was described by William Peter Hamilton back in the 1920's, is telling us that conditions are now stormy. This Primary Bear market will remain in force until negated by another confirmed bullish indication in accordance with Dow theory.Read full article... Read full article...
Wednesday, November 21, 2007
Dow Theory Stock Market Sell Signal May Be At Hand / Stock-Markets / Dow Theory
By: Anthony_Cherniawski
In my last article entitled, A Mere Correction or Reversal? I correctly identified the early beginnings of a reversal in motion. I also identified the next decline as a wave 3 or C and suggested it could be no shorter than 8 days, but could be as many as 13 or 21 days. Despite my preference for a 13-day decline, the Dow Jones Industrials (DJIA) had another 8-day decline. The cycle came early and set up the DJIA for yet another decline, a fifth wave.Read full article... Read full article...
Saturday, November 17, 2007
Bearish Stock Market Signal - Dow Jones Transports Non-Confirmation of Industrials / Stock-Markets / Dow Theory
By: Tim_Wood
Back in August when both the Industrials and the Transports moved down below their June lows many were calling that a Dow theory sell signal. I wrote here in early August that this was not the case. It is now time for another update on Dow theory.Read full article... Read full article...
Saturday, November 10, 2007
Transports Trend Close to Calling Dow Theory Bear Market, Deterioration in the China Shanghai Index / Stock-Markets / Dow Theory
By: Marty_Chenard
Today we will look at the Transportation Index, and what happened in China last night.
A potential market problem we pointed out last Friday, was the Transportation index.
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Saturday, August 11, 2007
Dow Theory and Stock Market Update / Stock-Markets / Dow Theory
By: Tim_Wood
Many proclaim that the recent decline below the June 2007 lows by the Industrials and the Transports served to trigger a Dow theory sell signal. Based on the evidence as I read the averages, this is not the case.
The extended advance up out of the 2002/2003 lows has proven to be one of the longest advances in stock market history. As a result, it has proven that the single most important aspect of Dow theory is price and that what we may perceive as value or a given market phasing is in fact secondary. In other words, price itself is the single most important aspect of Dow theory and the old time Dow theorists knew it.
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Wednesday, May 23, 2007
Dow Theory Introduction and Basic Tenets / InvestorEducation / Dow Theory
By: Christopher_Quigley
The Dow theory has been around for almost 100 years. Developed by Charles Dow and refined by William Hamilton, many of the ideas put forward by these two men have become axioms of Wall Street.
Background:
Charles Dow developed the Dow theory from his analysis of market price action in the late 19th. Century. Until his death in 1902, Dow was part owner as well as editor of the Wall Street Journal. Even though Charles Dow is credited with initiating Dow theory, it was S.A. Nelson and William Hamilton who later refined the theory into what it is today. In 1932 Robert Rhea further refined the analysis. Rhea studied and deciphered some 252 editorials through which Dow and Hamilton conveyed their thoughts on the market.
Friday, May 18, 2007
The Dow Theory…..Did it Fail? / Stock-Markets / Dow Theory
By: Tim_Wood
As the Industrials topped out in 2000 and plunged nearly 38 percent into the 2002 low, every indication, according to Dow theory, was that an extended secular bear market had begun. Also, because of the Dow theory phasing along with the normal bull and bear market relationships, as the rally from the 2002 low began, indications were that this was the rally separating Phase I from Phase II of a much longer-term bear market. So, what went wrong? In this article I want to examine the chain of events that have transpired since the 2002 low and in doing so look at where we are and the lessons that have been learned.Read full article... Read full article...