How To Avoid A Stock Market Crash Like 1987 and 1929
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This video is a response to The 2011 Stock Market Crash From A Chartist's Point Of View - Chart Analysis On World Indices
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You say Dow theory is triggered when a price breaks down below a previous trough. Dow theory is the correlation between the Dow Jones Industrial Average and the the Dow Transports. When the DJIA breaks out to new highs and it is not confirmed by a new high in the Transports that is called Dow Theory. You seem to misunderstand this concept. The DJIA represents the manafucturing base...the transports represent those goods being shipped...when they don't correlate it represents over production.
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Great vid, ill be visiting your site
mandokir223 2 years ago
@mandokir223 Thanks mandokir223! It will be good to have you stop by. Any suggestions are welcome too!
DaveASXWatch 2 years ago
Hi kfeder76,
Nice pick up! But there is more - the correlation between the Dow industrials and the Dow transports is only one part of Dow's Theory. The other two are market waves - three "phases" from boom to bust, upon which Elliott eventually based his wave theory. And the last is the higher peaks and higher troughs that I use here. For more, read John Murphy's Technical Analysis of The Financial Markets (1986).
Great to have you watching!
DaveASXWatch 2 years ago