Basics and the Dow Theory Flashcards
1
Q
Who is the trend?
A
The trend is your friend
2
Q
Russian government default
A
1998
3
Q
Black Monday
A
October 19, 1987
4
Q
Drawdown
A
Period of successive losses from a previous price peak
5
Q
Black Swan
A
An event or occurrence that deviates beyond what is normally expected of a situation and is extremely difficult to predict
6
Q
Types of markets
A
- Direct search
- Brokered
- Dealer
- Auction
7
Q
Major ETFs
A
- SPDR “Spider” - S&P500
- QQQQ “Cubes” - Nasdaq 100
- DIA “Diamonds” - DJIA
8
Q
Uptick
A
A transaction for a financial instrument that occurs at a higher price than the previous transaction
9
Q
3 major types of index construction
A
- Price weighted
- Market capitalization weighted
- Equally weighted
10
Q
Rhea’s 3 hypothesis
A
- The primary trend is inviolate
- The averages discount everything
- Dow theory is not infallible
11
Q
The 3 movements of the average
A
- Primary trend
- Secondary trend
- Minor
12
Q
Volume in bull market reversals
A
Bull markets terminate in a period of excessive activity and begin with comparatively light transactions
