The Dow Theory was conceived by Charles Dow during his analysis of market price action in the late 1800s.

So, what is the Dow Theory? Basically, it’s a set of principles and tenets that describe the general motions of the stock market and individual stocks. It’s not necessarily a path to beating the market, but a guide for understanding the underlying mechanisms involved. It’s based on two simple assumptions:

• It is impossible to manipulate a stock’s primary trend.


• The market discounts all presently available information.

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