Three Hypothesis of The Dow Thoery

If anyone who wants to know how the financial market really works, it really need to understand this first:

"Three hypotheses must be accepted without reservation whatsoever"

1.Manipulation:Manipulation is possible in the day-to-day movements of the averages, and secondary reactions are subject to such an influence to a more limited degree,but the primary trend can never be manipulated.

2.The Averages Discount Everything:The fluctuations of the daily closing prices of the Dow Jones rail and industrial averages afford a composite view of all the hopes, disappointments and knowledge of everyone who knows anything of financial matters. For that reason, the effects of coming events (excluding acts of God) are always properly anticipated in their movement. The averages quickly appraise such calamities as fires and earthquakes.

3.The Theory Is Not Infallible:The Dow Theory is not an infallible system for beating the market. Its successful use as an aid in speculation requires serious study, and the summing up of evidence must be impartial. The wish must never be allowed to father the thought.