Our Dow Theory Prediction
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Dow Industrial Average green
Dow Transportation Average blue
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12/22/04 'Normally,' and I emphasize the word normally, [Tuesday's joint new highs by the Dow Industrials, Dow Transports, and Dow Utilities] would call for sharply higher price....
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| Dow Theory in a nut shell: Charles Dow, founder of the Wall Street Journal, developed the Dow Theory from his analysis of market price action in the late 19th century.
The Theory was popularized by William Hamilton, S.A. Nelson, Robert Rhea, Perry P. Greiner, Hale C. Whitcomb, Richard Russell and goes like this:
Stock market rallies, confirmed by both the Transportation and Industrial Averages, penetrating to new highs, with declines failing to break below previous lows, indicate a bullish trend.
Conversely successive new lows of both averages, with rallies failing to penetrate previous highs, have a bearish implication.
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