Dow Theory
Dow theory is often used as an indicator of when a bear market may be about to start.
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.
See Tim Bennett's video tutorial: What is an index?
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
-
SIPP holders to get cash warnings and be offered default funds
News Providers will be required to offer investors a default fund and must warn customers of the inflationary risk of cash savings the regulator has said. What the new rules mean for your retirement pot?
By Marc Shoffman Published
-
Zoopla: Asking price discounts hit a five-year high – is now the time to buy a property?
News Zoopla’s October House Price Index shows sellers are accepting discounts of 5.5% on average to secure a sale – we reveal where homeowners are taking the biggest asking price cuts
By Marc Shoffman Published