|  SEP 1990

Dow Theory by Melanie F. Bowman and Thom Hartle

Dow Theory by Melanie F. Bowman and Thom Hartle For a man who had the perfect opportunity to widely publicize his theory of stock market trends but never used it, Charles H. Dow nevertheless left a definitive legacy—the Dow theory is at the root of technical analysis and continues to influence trend analysis after nearly a century. Dow was a newspaper reporter and a member of the New York Stock Exchange in the 1880s before he established the Dow Jones financial news service and The Wall Street Journal. Ironically, most of what we know about his theory comes from the editor's closest colleagues. Dow himself was extremely cautious and maintained his stock price averages for 17 years before he would write even fragmentary discussions of his theory as part of his business editorials. Despite associates' exhortations, Dow died without writing a systematic presentation of his findings. What is perhaps most remarkable is not that the Dow theory was kept alive by the editor's contemporaries, but that it remains a fundamental and highly useful tool even in a stock market that bears little resemblance to the one in which Dow worked nearly 100 years ago.

by Melanie F. Bowman and Thom Hartle