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Data:2009-12-12 2:34
Dow Theory's basic law
1, the average index that contains everything;
Second, the market there are three trends;
1, the main trend (one year or even years);
2, secondary trends (three weeks to three months, adjusting the bit is usually the previous trend of one-third to two-thirds of the movement, the most common for 50%);
3, small trends (less than three weeks, minor fluctuations).
Third, the main trends are divided into three stages;
1, the collection phase (after a big decline in the market "bad" message constantly, prices began to stabilize, astute investors began to buy);
2, public participation stage (accelerated rise in prices, the message began to turn for the better, most technology-based trend followers begin to participate);
3, distribution of stage (all the press began to publish bullish story, everyone into the market, the astute investors began to sell).
4, various average index must be mutual authentication;
5 volume must be confirmed trends;
1, the rising trend in the rise in volume with increased fall reduction;
2, the downward trend in the decline in volume accompanied by an increase, up decrease.
6, given a clear trend reversal signal is assumed to remain in effect until;
1, failure swing;
Challenges of high C high A failure, then the market fell below low B, constitute at point S at a "sell signal."
2, non-failure swing.
High C breakthrough in high A, then the market fell below low B constitute the S1 at the first "sell signal", then the market rebounded to a high point of E, low D below constitute the final S2 at the second "s out the signal. "
Note: Failure swing and non-failure would also be useful when you swing at the bottom.
