Dow Theory was derived from 252 editorials written by Charles H Dow, the first Editor of Wall Street Journal.
Dow Theory defines bull market as one where index of industrial cos and index of transportation cos have reached higher high on the charts as compared to a previously important high. Generally transportation index goes up first followed by industrial index.
Conversely it can be implied that a bear market is one where both the industrial index and transportation index are going down on the charts or one is going up and the other is going down.
When transportation of goods is buoyant it means the demand is high and so more goods are produced.
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