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Category: Dow Theory
The news items published under this category are as follows.
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.”
Read full article... Read full article...
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...
