[7. Bearish Market]
Long-term downward trend can also be divided into three phases.
<Phase 1>
(Starting at the end phase of the previous bullish market).
This is the period of sell-through (distribution).
At this stage, astute investors who can see ahead, feel that the company's earnings have reached abnormally high levels,
and are selling off their stocks.
Volume is still at high levels, but the volume on the rebound is decreasing.
And while the public is still active, they begin to show a sense of frustration as expected profits disappear.
<Second Phase>
It is a moment of panic.
The number of buyers decreases, while the number of sellers increases.
The downward trend of stock prices suddenly becomes steep, and the volume also reaches a very high number.
After the moment of panic, there will be a fairly long corrective recovery period or a sideways trend will continue.
Then the third phase begins.
Whether you had stocks all the way through the panic stage or not,
Investments made during the period of panic when you thought stock prices were lower compared to 2-3 months ahead are created.
The News of individual stocks is now starting to deteriorate.
<Third Phase>
As the third phase progresses, the downward movement gradually slows down...

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[Long-term trend phase]
[6. Bullish market]
The long-term trend of rising is usually (though not always) divided into three phases.
<Phase 1>
Investors who can see ahead well (the businesses are currently bad, but they will certainly recover,
As the supply decreases, this is a period of accumulation where the plan is to gradually raise the Buy limit orders.
During this period, financial reports are still poor (often the worst).
The public is completely fed up with the Stocks market.
Trade is not very active, but it starts to increase during the Bullish (short-term rise).
<Second Phase>
It is a quite solid rise, and as corporate performance improves, the volume also increases,
the upward trend in corporate earnings begins to attract attention.
This is the phase where technical investors can obtain the largest profits.
<Third Phase>
As the public gathers at the Exchange, the market becomes lively.
The financial News of individual stocks is all positive, and the rise in Stock prices becomes remarkable.
It has again started to appear on the front page of newspapers, and the number of new stock issuances has become enormous.
At this time, acquaintances and others come to visit...

【5. Short-term Fluctuations (Daily Changes)】
From the perspective of Dow Inc Theory, these are insignificant small fluctuations that have no meaning on their own.
(Sometimes they can last for about three weeks, but usually within six days).
However, this is what gathers to form a correction trend.
It is not always the case, but in most situations,
Intermediate fluctuations are formed by a series of three or more distinguishable short-term waves, whether they be corrective or part of long-term fluctuations occurring between corrective movements.
They are formed by a series of three or more distinguishable short-term waves.
The conclusions drawn from stock prices during these daily fluctuations tend to be incorrect.
Only short-term fluctuations among the three can allow for stock price manipulation.
(In reality, I don't believe that stock price manipulation can happen over a significant Range in the current situation.)
Long-term trends and corrective trends cannot be subject to stock price manipulation.
This is because the American Treasury does not neglect vigilance against stock price manipulation.
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【The similarities between the movement of the stock market and the movement of the sea】
Before moving on to the sixth concept of Dow theory,
By comparing the movements of the stock market to those of the sea, three trends emerge...

[4. Correction Trend]
It is an important reaction that hinders the progress of long-term trends in stock prices.
This represents a medium-term pullback or correction occurring in the process of a Bullish market, as well as a medium-term rally or recovery happening in the process of a Bearish market.
Usually, these last from three weeks to several months. It is rare for them to last longer.
Typically, a correction will take place ranging from one-third to two-thirds of the long-term trend.
In a Bullish market, if the industrial stock average rises by 30 points,
this corrective movement is expected to result in a decline of more than 10 points but less than 20 points.
And so, a long-term movement begins.
However, the rule of one-third to two-thirds is not absolute.
This is merely a probabilistic expression.
Most corrective movements fall within this limitation.
Most have reached the midpoint (the lower point of 50% of the upward trend in the long-term trend).
It is rare for it to fall below one-third, but sometimes it can lose all the gains.
With the above, we have learned two criteria to distinguish the correction trend.
In the opposite direction of the long-term trend, it must continue for at least three weeks.
...

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[Basic Concept]
Let’s go back to the Dow Inc theory and explain the basic concepts of the theory here.
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[1. The average stock price incorporates everything (except for force majeure)]
Because the average stock price reflects the market activities of thousands of investors.
Among these investors, there are those with the best insights as well as those who have the best information on trends and various events.
The daily fluctuations of Dow Inc are well known, predictable, and incorporate all the conditions affecting Stock demand.
Even unpredictable natural disasters are quickly factored in and their effects evaluated once they occur.
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【2. Three Trends】
Generally, the stock market, which represents the price of Stocks, fluctuates with trends.
The most important of these trends is the long-term trend (major or primary trend).
This usually lasts for one year or more as a significant movement, resulting in an increase or decrease of more than 20% in the stock price.