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Dow Theory
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Dow Theory is a simple theory of stockmarket performance in the U.S. markets - based on the behaviour of the New York Stock Exchange's Dow Jones Industrial Average - its main index - and one of the subsidiary indices, the Transportation Average.
The theory claims that the market is on an uptrend if one of these two indices advances past a previous high and is followed by the other and vice versa.
Effectively, Dow Theory watchers are looking for the two indices to give confirmation to each other - one moving on its own not being sufficient to confirm a trend either up or down.
Share prices from Wall Street can be found in Stockmarket
See Also: Online share dealing service Stockmarket Centre
Last Updated: June 2007 © Moneyextra.com
Our senior editor Robin Amlôt recommends you should consider taking independent financial advice before acting on any article. Please contact us for help with your individual circumstances if any assistance is required.