Letters To S&C  |  AUG 1998

Stocks & Commodities V.16:8: Letter

DOW THEORY Editor, I especially enjoyed your interview in the June 1998 STOCKS & COMMODITIES (“Before and beyond technology: Michael Sheimo on Dow theory”) because Sheimo comments on the Dow theory in light of the much larger volume and velocity of trades today as compared with the late 1800s, when Charles Dow developed his theory. Based on other articles that have been published in your magazine and based on my own research, I’ve concluded that Dow theory has not lost its relevance to market behavior in spite of massive changes in trading volume and velocity since the 1800s. Although electronics and an increase in the number of traders and size of trades have increased volume and velocity, the behavior of market trends still follows the old rules, although perhaps at faster rates. Thus, market history and some of the older trading rules remain relevant to traders today. I believe that studying the famous market events, excesses, and theories of the past can make one a much better trader today. Please continue to offer articles com-menting on and updating classical as well as new investment theories. RANDALL COVILL, via E-mail

by Technical Analysis, Inc.