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Dow Theory had some validity many years ago when the markets were primarily
traded by a few elite types who had the inside scoop and information
traveled very slowly. But that was long before the days of Mutual Funds,
Retirement Funds, Index Funds, Hedge Funds and 9000 Funds chasing 2000
Stocks... Long before the days of astronomical PE ratios, and Internet
Trading and Mom, Pop and the Kids firing off Buys & Sells on a whim or a
Whisper Number... Long before the days of Stock Index Futures, Earnings
Surprises, and Computerized Program Trading...
Using Dow Theory today to predict anything about the Market is a bit like
attempting to use a 1920 Model-T mechanic's manual to diagnose a problem
with your 1999 Corvette...
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At 11:30 PM 8/31/98 -0700, you wrote:
>
>>>In a mechanical model it actually works really well going back several
>>>decades 605 to 70% of the time.
>>
>>Okay, proove it! Where are the system stats? How has it performed over
>>the last decade? You're throwing numbers around without any proof.
>
>It was based on a publication a few years ago, I think in Technical Analysis
>or Futures magazine. I remember looking at the charts and being surprised
>at the quality of some of the signals and the overall high win ratio. Worked
>fairly well over many decades. It didn't work that well recently like the
>last decade as I said.
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