The Accurate Alternative to Dow Theory Forecasts
Updated May 13, 2023
We’ve Revised This Article on May 13, 2023, and Added New Information at the End to Help You Make More Informed Decisions.
The transport topped out in November of 2014, and according to the Dow theory, this is a big negative; the Dow industrials should have followed suit. Instead, the Dow soared higher, paying no heed to this theory proving to a large degree that this argument has lost its value. After all, it is a theory, and the definition of a theory is “a supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.”
Dow Theory Forecasts: Alternative Might be Better?
That is why way back in 2006, we offered an Alternative that proved far more accurate and reliable than the Dow theory. Just to let this sink in, the transport topped out almost two years ago, and instead of trending lower, the markets have surged to new highs. If you look at the above chart, the Transports appear to be finally gathering momentum and breaking out. In the Dow theory alternative, we stated that the Utilities led the way instead of the Dow transports; well, let’s see if that holds.
The Dow Theory Signal is Malfunctioning?
The Dow rallied until Aug of 2016, proving that the utilities are a better indicator of market direction than the Dow transports. At this point, the utilities are building momentum to take off again. If the pattern holds, then the Dow should follow its path.
It is also interesting to note that after almost two years of doing nothing, the Dow transports also attempted to break out.
Paying attention to what the utilities are doing in the future could be rewarding. Once the Dow utilities start to trend upward, it should serve as a strong signal that the Dow will follow in its path.
Using Original Dow Theory In Technical Analysis Leads to Bad Results
The Dow utilities and the Dow industrials traded to new highs; this means that rather than leading the way up, the Dow transports propel individuals to draw the wrong conclusion. The Dow Theory ceased to work correctly a long time ago, and in the era of hot money, it has a hard time trying to be relevant.
Using the alternate Dow Theory in technical analysis, where the focus is on the Dow utilities, yields better results. Maybe it is time to put this 100-year-old theory to rest and try something new; we will let you be the judge.
The Tactical Investor’s Alternative Dow Theory: May 13, 2023 Update
The Dow Theory has been a reliable tool for market analysis for over a century. However, it has its limitations, and we believe a far better alternative is available today.
The Tactical Investor’s Approach
The Tactical Investor offers an innovative approach that monitors Dow utilities to predict market performance. By analyzing the oversold range and forming a bottom, the Tactical Investor’s Alternative Dow Theory produces a more precise market analysis than the traditional Dow Theory.
Incorporating Mass Psychology and Contrarian Investing
We recommend incorporating mass psychology and contrarian investing in enhancing the signal issued by the Tactical Investor’s Alternative Dow Theory. Mass psychology refers to the behaviour of the masses in the market, which can significantly impact market trends. Investors can profit from market inefficiencies created by overreactions to news and events by taking a contrarian approach.
Achieving More Profitable Outcomes
By incorporating mass psychology and contrarian investing into the Dow Theory, investors can make more informed investment decisions and identify market trends accurately. We believe that the Tactical Investor’s Alternative Dow Theory, combined with mass psychology and contrarian investing, offers a more refined and elegant approach to market analysis. By adopting this approach, investors can achieve more profitable outcomes.
Impiety. Your irreverence toward my deity.
Ambrose Bierce
Dow Theory Forecasts FAQ
Q: What is the Dow Theory, and who created it?
A: The Dow Theory, created by Charles Dow, is a late 19th-century theory suggesting the stock market reflects the economy’s overall state.
Q: How does Dow Theory work, and what are its limitations?
A: Dow Theory relies on the Dow Jones Industrial Average (DJIA) and market trends identification. Limitations include historical data reliance and the inability to consider external factors.
Q: What is the Alternative Dow Theory, and how does it differ from the traditional Dow Theory?
A: The Alternative Dow Theory focuses on Dow utilities for more precise market analysis, differing from the traditional Dow Theory’s reliance on DJIA.
Q: Is the Dow Theory still relevant today?
A: Dow Theory remains relevant but has limitations, such as reliance on historical data and potential forecasting inaccuracies.
Q: What are the benefits of incorporating mass psychology and contrarian investing into Dow Theory Forecasts?
A: Incorporating mass psychology and contrarian investing enhances Dow Theory Forecasts, enabling more informed decisions and accurate market trend identification.
Q: How can investors incorporate mass psychology and contrarian investing into Dow Theory Forecasts?
A: Investors can incorporate mass psychology and contrarian investing by researching, developing investment plans, and adopting a measured approach.
Q: What is contrarian investing, and how can it profit from market inefficiencies?
A: Contrarian investing involves opposing prevailing market sentiment, allowing investors to profit from market inefficiencies caused by overreactions.
Q: What is mass psychology, and how can it impact market trends?
A: Mass psychology refers to market participants’ collective behavior, significantly impacting market trends and informing investment decisions.
Q: What are the traditional Dow Theory’s limitations?
A: Traditional Dow Theory limitations include reliance on only two indices and inaccurate short-term market fluctuation predictions.
Q: What is the Tactical Investor’s Alternative Dow Theory, and how does it differ from the traditional Dow Theory?
A: The Tactical Investor’s Alternative Dow Theory focuses on Dow utilities for market predictions, offering more precise analysis than the traditional Dow Theory.
Q: What are the benefits of adopting the Tactical Investor’s Alternative Dow Theory and incorporating mass psychology and contrarian investing?
A: Adopting the Tactical Investor’s Alternative Dow Theory and incorporating mass psychology and contrarian investing lead to more profitable outcomes and informed decisions.
Q: How can investors make informed decisions based on research and analysis?
A: Informed decisions require thorough market research, target audience identification, clear goals, resonating messaging, appropriate marketing channels, and campaign success measurement.
Q: Is the Dow Theory Signal malfunctioning?
A: The Dow Theory Signal isn’t malfunctioning but has limitations, as demonstrated by the Dow transports topping out in November 2014 without the Dow industrials following suit.
Q: Does using the original Dow Theory in technical analysis lead to bad results?
A: Using the original Dow Theory can lead to bad results, while the alternate Dow Theory focusing on Dow utilities yields better outcomes.
Enrich Your Knowledge: Articles Worth Checking Out

The Spy 200 day moving average
Read More

Mob Mentality: Understanding Its Power and Influence
Read More

Market Mastery: The Best Investing Books for Your Success
Read More

Psychology of investing: Don’t Follow The Crowd
Read More

Unleashing the Power of Small Dogs Of the Dow
Read More

The Aroon Oscillator: Unlocking the Secrets of Market Trends
Read More

The Ultimate Guide to Market Psychology Books
Read More

Herd Mentality: Understanding the Pros and Cons of Conformity
Read More

Cracking Market Cycle Psychology: Navigating the Ups and Downs
Read More

The Yen ETF: A Screaming Buy for Long-Term Investors
Read More

What is Relative Strength in Investing? A Beginner’s Guide
Read More

The RSI MACD Strategy: A Comprehensive Guide to Trading
Read More

The Contrarian Outlook: Unleashing Success
Read More

Mastering the MACD Strategy: A Powerful Tool for Investors
Read More

How to Invest in ChatGPT: A Beginner’s Guide
Read More

Mastering the Market: Rise Above The Angry Mob Mentality: Secure Your Victory
Read More

Mastering the Trading Game with the Global Dow Jones Index
Read More

Financial insights: The Inside Scoop
Read More

Nasdaq TQQQ: Amplified Returns and Double-Edged Risks
Read More

The Patient Investor
Read More

Why Is Inflation Bad for the Economy? Demystifying the Menace
Read More