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21st Century Use of the Charles Dow Theory, Part 3

In Part 2 of our series on Dow Theory, we focused on the first tenet: the price discounts everything.  In this article we will focus on the second tenet: the market has 3 trends.  As a quick refresher, the 6 tenets of Dow Theory are:

1. The price discounts everything.
2. The market has 3 trends.
3. Major trends have 3 phases.
4. The averages must confirm each other.
5. Volume must confirm the trend.
6. A trend is assumed to be in effect until it gives definite signals that it has reversed. Read the rest of this entry »

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