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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Paul Shread who wrote (34812)	12/2/1998 3:58:00 PM
From: donald sew	Respond to of 94695

Paul, >>>> DOW THEORY: A simple theory of stockmarket performance in the U.S. markets which is based on the behaviour of the New York Stock Exchange's Dow Jones Industrial Average, its main index, and one of the subsidiary indices, the Transportation Average. The theory claims that the market is on an uptrend if one of these two indices advances past a previous high and is followed by the other and vice versa. Effectively, Dow Theory watchers are looking for the two indices to give confirmation to each other, one moving on its own is, they believe, not sufficient to confirm a trend either up or down. moneyworld.co.uk <<<<<<<<<<<<< Hope this helps. seeya

To: Paul Shread who wrote (34812)	12/2/1998 3:59:00 PM
From: Terry Whitman	Read Replies (1) \| Respond to of 94695

There are probably as many different interpretations of Dow Theory as there are interpreters. My understanding of it is basically what you said in your last post- The transports and industrials should move together in a healthy market, and a new high in one should be confirmed by a new high in the other in short order (2-3 months). This is possible going forward, but the transports are going to have to rally quite powerfully for that to happen. Here's your 4 year cycle link: cpcug.org You should probably also pay some attention to the studies on P/E ratios, inflation adjusted returns, and the secular (long term)cycle. TW

To: Paul Shread who wrote (34812)	12/2/1998 5:59:00 PM
From: bearshark	Read Replies (2) \| Respond to of 94695

Paul: Dow Theory is a set of basic market rules or tenets. Some of the rules are that there are three major trends in a market move, there are generally three phases in a bull and bear market, the confirmation of the TRAN and INDU, the market knows all, volume goes with the trend, only closing prices are used in its calculation, etc. It is the father of market theory and it is what R. N. Elliot used as the start for his theory as he rocked himself on his porch. Moving averages have no place in Dow Theory.