Wednesday, December 22, 2004
Interviews -- Get out! Get out! Whoever you are! - MSN Money
Interviews -- Get out! Get out! Whoever you are! - MSN Money
Part of the premise of your theory is that the Dow Jones Industrial Average and the Dow Jones Transportation Index should move in tandem to confirm each other's new highs or new lows. What does that tell you?
The industrial average reflects the industrial capacity of the nation, the ability to produce goods. The transportation average basically reflects shipping, travel and movement of goods. The thesis is that if you produce, but you're not selling, you're in trouble; and if you're selling a lot, but you haven't got the production behind you, you're in trouble. The Dow Theory requires that the two averages move in harmony, both on the upside and the downside, and when they do that, the moves are considered valid.
The real basis of Dow Theory is values. Beyond that, according to the Dow Theory and according to observations first put forth by Charles Dow back at the turn of the century, the market makes a long trip on the upside of the bull market, and usually yields on the Dow drop down to 3% or below.
# posted by arcady @ 2:34 PM 
Comments:
Post a Comment
<< Home
<< Home
