Indices Must Confirm Each Other

Indices Must Confirm Each Other

In order for a trend to be established, Dow postulated indices or market averages must confirm each other. This means that the signals that occur on one index must match or correspond with the signals on the other. If one index, such as the Dow Jones Industrial Average, is confirming a new primary uptrend, but another index remains in a primary downward trend, traders should not assume that a new trend has begun.

Dow used the two indices that he and his partners invented, the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA), on the assumption that if business conditions were, in fact, healthy, as a rise in the DJIA might suggest, the railroads would be profiting from moving the freight this business activity required. If asset prices were rising but the railroads were suffering, the trend would likely not be sustainable. The converse also applies: if railroads are profiting but the market is in a downturn, there is no clear trend.y

1. What causes the motion of a body which is initially in the state of rest?
2. People sitting in a moving bus experience a jerk when the bus stops. This is due to

3. Passengers sitting in a stationary car experience a jerk when the car suddenly starts. This is due to which law

4. In the following figure, what will happen to the ball hanging from the roof of the car if the car suddenly moves towards left (direction shown by arrow)?

5. A straight moving bus takes a sharp right turn. What will happen to the passengers sitting inside the bus?

6. Why do we not experience any leaning when a train takes a turn?

7. Inertia is analyzed in which law context

8. What causes the motion of a body which is initially in the state of rest?
9. People sitting in a moving bus experience a jerk when the bus stops. This is due to

10. Passengers sitting in a stationary car experience a jerk when the car suddenly starts. This is due to which law