Dow theory is named after the 19th century editor of the Wall Street Journal, Charles Dow. It is often used as an indicator of when a bear market may be about to start.
The idea is that when a downward trend in the Dow Jones Industrial average is confirmed by a downward trend in the Dow Jones Transportation average, firms are no longer shipping goods between each other, which indicates slowing activity and means that a new bear market has begun.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
8 of the best properties for sale with award-winning gardensThe best properties for sale with award-winning gardens – from a Victorian Gothic rectory in Hampshire, to a Georgian house in Kent with gardens designed by multiple Royal Chelsea Flower Show gold medallist Roger Platts
-
How does the Lifetime ISA work? Key LISA rulesWhat is a Lifetime ISA (LISA) and how much could the government bonus boost your savings by? We look at the perks and the pitfalls.
