Dow theory

In accordance with Dow theory the primary trend is considered to be in force until it is reversed by a joint move of the averages above or below the previous secondary high or low point. My read on Dow theory is that the bullish primary trend change, which followed the March 2009 low, still remains intact, because we have not yet seen a joint close below a previous secondary low point. The decline into the June closing low carried the Industrials below their February secondary low point, but it is because the Transports have held above their February secondary low point that a primary trend change has not occurred.

FIND OUT MORE