Dow Theory  |  DEC 2001

Working Money: Confirming Bear Markets by David Penn

Working Money: Confirming Bear Markets by David Penn In a down market,the only question as important as “How low will we go?” is “Will we know when we’re there?” While many technical analysts have relegated Dow theory to that same attic in which the old tickertape machines are stashed, the underlying premise of this approach toward the stock markets, now more than 75 years old, remains both valid and potent. In fact, Dow theory can be an effective intellectual haven from the “24/7, 365” barrage of information, financial and market news reports, and analysis. Although it is true that intraday and day-to-day movements in the stock market can provide clues to entry and exit opportunities, it is equally true that a sound understanding of larger intermediate and long-term trends is key to putting any investment or trading decision in the proper context.

by David Penn