Dow Theory

Dictionary Says

Definition of 'Dow Theory'


A theory which says the market is in an upward trend if one of its averages (industrial or transportation) advances above a previous important high, it is accompanied or followed by a similar advance in the other.



Investopedia Says

Investopedia explains 'Dow Theory'


The theory also says that when both averages dip below previous important lows, it's regarded as an indicator of a downward trend.

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