Dow Theory is one of the foundational frameworks of technical analysis, developed from the writings of Charles Dow in the late 19th century. It establishes principles including that markets move in three types of trends (primary, secondary, and minor), trends persist until a clear reversal signal occurs, and market averages must confirm each other.
Example
“According to Dow Theory, the primary uptrend was confirmed when both the Dow Industrials and the Dow Transports made new highs simultaneously.”