How to identify the end of a trend

...using Dow Theory

This clip is an excerpt from ALAN HULL TV which is a weekly video newsletter. For more information click here

Alan reviews a chart of FLT and shows how to determine the end of a trend using Dow Theory.

In this example, the price was trending nicely, making higher highs and higher lows. According to Dow Theory is defines a rising market.

However, the price action changes and begins to make outside swings; that is, a higher high and a lower low. When this happens the market is classified as sideways. Therefore the chart in review changes from a rising trending market to a sideways one.

In the price action following the analysis the price makes a lower low and then continues lower becoming a falling market.

Dow Theory

Therefore, using Dow Theory, the chart in review changes from rising to sideways to becoming a falling market, see chart below.

How to identify the end of a trend


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