Dow theory to understand stock market moves
Hello every one lets understnad Dow theory To understnad to Decode market moves There are six main components to the Dow Theory. 1. The Market Discounts Everything The Dow Theory operates on the Efficient market hypothesis which states that asset prices incorporate all available information. Earnings potential, competitive advantage, management competence—all these factors and more are priced into the market, even if not everyone knows all or any of these details. In more strict readings of this theory, even future events are discounted in the form of risk. 2. There Are Three Primary Kinds of Market Trends Markets experience primary trends which can last a year or more, such as a bull or bear market. Within the broader trends, secondary trends make smaller movements, such as a pullback within a bull market or a rally within a bear market; these secondary trends can last a few weeks to a few months. Finally, minor trends can last a few days t...