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Investing Glossary:
Dow Theory
Copyright 2012,
Campbell R. Harvey. All Rights Reserved.
Do not reproduce without explicit permission.
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| A description of Market behavior, invented by Charles Dow, which divided price moves into three types of trends: major (lasting from months to years), intermediate (weeks to months) and minor (days to weeks). A primary corollary is that of mutual Confirmation of moves by both the Industrial Average and the Transportation Average, i.e. a significant move by one average must be confirmed by a similar move in the other.used in the context of general equities. Technical theory that a major trend in the Stock market must be confirmed by simultaneous movement of the Dow Jones Industrial Average and the Dow Jones Transportation Average to new Highs or lows. provides the theory with the signals.
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