tag:blogger.com,1999:blog-6134743053361487135.post5997719896525527461..comments2023-06-15T09:28:28.686-04:00Comments on Dow Theory Investment: Dow Theory special issue: Is the primary trend for stocks about to change?The Dow Theoristhttp://www.blogger.com/profile/05344444810007324303noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6134743053361487135.post-67942674026401961182012-11-17T08:56:13.640-05:002012-11-17T08:56:13.640-05:00Hi Bhavir,
I am afraid I cannot answer your quest...Hi Bhavir,<br /><br />I am afraid I cannot answer your question.<br /><br />I make no pretense of knowing everything and, to be sincere, I don’t know the answer for your question. <br /><br />I feel, however, that applying Dow Theory to emerging markets is very interesting as it provides diversification.<br /><br />While I cannot answer your questions, I can give you the following guidelines:<br /><br /><br />This post gives useful guidelines concerning what should be looked for when looking for a suitable pair of foreign indices:<br /><br />http://www.dowtheoryinvestment.com/2012/10/can-dow-theory-be-applied-to-foreign.html<br /><br /><br />This post is also useful in helping you select the appropriate indices.<br /><br />http://www.dowtheoryinvestment.com/2012/09/do-transports-still-matter-under-dow.html<br /><br />The basic message is the indeces chosen should be:<br /><br />a) Representative enough of the broad markets (liquidity, active).<br /><br />b) With enough correlation to move quite in tandem.<br /><br />c) Without so much correlation that they are identical.<br /><br />d) When dealing with different countries both countries should be quite similar. One cannot mix the stock index of a country with high interest rates with that of a country with low interest rates. Or I would not advise to use the index of a commodity exporter country together with the index of a commodity importer country.<br /><br /><br />Send me an email if you find something and with pleasure, I can give you feedback. I am keenly interested in expanding the field of application of the Dow Theory in a globalised world. <br /><br />Regards.<br />The Dow Theoristhttps://www.blogger.com/profile/05344444810007324303noreply@blogger.comtag:blogger.com,1999:blog-6134743053361487135.post-68497167055850106622012-11-17T00:31:55.960-05:002012-11-17T00:31:55.960-05:00HI,
If I were to map the dow theory in Emerging M...HI,<br /><br />If I were to map the dow theory in Emerging Markets, which index / index pairs could serve as better indicators?<br />Do you know of related research / work in EM horizon?Bhavirhttps://www.blogger.com/profile/08258148053969052614noreply@blogger.comtag:blogger.com,1999:blog-6134743053361487135.post-20830507254440784472012-11-12T16:55:39.895-05:002012-11-12T16:55:39.895-05:00Keep me posted when you find a suitable index.
Re...Keep me posted when you find a suitable index.<br /><br />Regards.The Dow Theoristhttps://www.blogger.com/profile/05344444810007324303noreply@blogger.comtag:blogger.com,1999:blog-6134743053361487135.post-49733580612092436852012-11-12T15:52:47.107-05:002012-11-12T15:52:47.107-05:00Good point. I guess I need to do some work on find...Good point. I guess I need to do some work on finding another suitable index to check confirmation. Thanks for your thoughts.Remochttps://www.blogger.com/profile/12626620056022638163noreply@blogger.comtag:blogger.com,1999:blog-6134743053361487135.post-63372895233957284862012-11-12T15:29:21.702-05:002012-11-12T15:29:21.702-05:00Hi Remoc,
We should keep things in perspective. D...Hi Remoc,<br /><br />We should keep things in perspective. Dow Theory can be applied to foreign indices provided the basic tenets of the Dow Theory are respected, one of them being the principle of confirmation which requires, at least, the use of two suitable indices in order to look for confirmations.<br /><br />So one index alone like the EAFE may in itself not flash a primary bear market signal. It can be bearish but under Dow Theory we need two suitable indices confirming each other. As I wrote in the post such confirmation is particularly necessary when it comes to primary bull or bear market signals. <br /><br />Sincerely,<br /><br />The Dow Theorist<br />The Dow Theoristhttps://www.blogger.com/profile/05344444810007324303noreply@blogger.comtag:blogger.com,1999:blog-6134743053361487135.post-32071895422521375112012-11-12T10:21:47.077-05:002012-11-12T10:21:47.077-05:00I'm a novice at the Dow Theory, but it appears...I'm a novice at the Dow Theory, but it appears to me that the EAFE foreign stock index has issued a primary bear market signal. This is in spite of the fact that the foreign stocks are already at considerably lower valuations than the U.S. stocks, based on their cyclically adjusted PE. This may not bode well for U.S. stocks. Remochttps://www.blogger.com/profile/12626620056022638163noreply@blogger.com