Dow Theory has been a popular tool on Wall Street for 100-plus years. It considers two significant market indexes — the Dow Jones Industrials Average (DJI) and the Dow Jones Transportation Average (DJT). Some theorists say that when “lower highs” are immediately followed by “lower lows” on both the DJI and the DJT, the price action has triggered a bear market.
Dow Theorists differ on interpretation. That said, the possibility of bearish price depreciation is difficult to ignore.
Many investors are still hoping that the Fed can prevent the 2020 stock bubble from bursting. If they can, they’ll probably need to do more than cut the overnight lending rate from 1.5% to 0.75%.
