Dow Theory

Dow Theory definition - finance
The theory that any major stock market trend must occur both in the Dow Jones Industrial Average and the Dow Jones Transportation Average; both indices must reach either new highs or lows, otherwise the market will fall back to its previous trading range. Dow Theory is based on a technical analysis theory pioneered by Charles Dow, one of the founders of The Wall Street Journal and Dow Jones & Co.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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