Chaos, theory ot, 2 - Depression, 1 , 2U, 127

Character, 232-234 Deregulation, 64,120-121.152

Charts, 69-71, 86 dEstaing, Valery Giscard. 119

Chicago Board of Exchange ( ), 11, Developing countries. 111 27,184 Dickens Pattem, 240-241

Clasing, Henry, 184 Discipline, 207. See also Emotional

CoUectivist ideology, 118,119-120 discipline

Commission, 13, 64, 81, 273 Discount rate, 152-153,159,169. 273 Commitment, 217, 219,244 Discount window borrowing, 152-153. Commodity(ies), 55, 57, 62,81-82,84, 156,268

90,93, 95,103,273 Distress selling, 23, 39

Commodity Index, 77 Distribution, 54-55,113

Communism, 118 Disvalues, 233,234

Compulsion, 250 Divergence, 52,101.168. 264

Confirmation, 39,43,52-54,89,107 Dividend, 22,106, 273

Conscious mind, 225-226 Dole, Robert, 160

Consolidation, 56, 273 Dollar, value of, 109,119,127.128,

Consumer Price Index (CPI), 141, 130,146,156-157,169

150-151,156,159,170 Doubt, 178-179

Contract, 10,129, 273 Dow, Charles, 30,33,166

Corollary, 24 Dow Jones & Company, 30

Correction, 16,37,43-47,84, 85,167, Dow Jones Industrial Average: 273 in a bear market, 42,43. 44

Crack-up boom, 143,154 in a bull market, 45,46,54,167

Credit, 116,117,129 confirmation and, 53

Dow Jones Industrial Average (cont.) as the villain, 204-206

defined, 273 Endogenous events, 134,135

as an economic indicator, 32-33, 36 Ends values, 233

moving averages and, 88, 89, 90, 91 Entrepreneurial component, 139,140,

origins of, 30 143,153

oscillators in, 99,100 Essentials, thinking in, 16-20,60,

and the stock market mini-crash of 189-190

1989,17,18 Evaluation, 114,115,117, 232

trends in, 12, 27,31, 51 Excess reserves. 149,156,158

Dow Jones Transportation Average: Exchange, 34,112,114,115, 274

in a bear market, 42,43,44 Exchange agreement, 129

in a bull market, 45,46 Executions (of trades), 186-187

confirmation and, 53 Exercise, 10,274

defined, 273 Exeter, John, 266

as an economic indicator. 32-33,36 Exogenous events, 134,135

and the stock market mini-crash of Expansion, 31, 111, 127,130 1989,18 Expiration date, 10, 274

trends in, 12, 31 Extended credit, 156, 268

Downside risk, 24 Downward trend, 51,60, 71, 74-75,

78 Failure, 185,245-246

Dow Theory, 12, 27,30-47,189, 264 False pride, 16, 205,244,246, 256-257,

hypotheses of, 32-35 263

and individual stocks, 107 Fast market, 184

origins of, 30-31 Fear, 179,185, 201

theorems of, 35-46, 53 Federal Funds. 152,153, 274

Federal Funds Rate, 274 Federal Open Market Committee (FOMC), Eamings, 21, 60,104,105-107,274 144-145,274 Easy credit, 34, 53,127,130 Federal Reserve Act of 1913,145

Economics: Federal Reserve Board, 13, 32,44,109,

according to Robinson Cmsoe, 120,127,144,274

112-115 Federal Reserve District Banks, 145,146,

defined, 113-114 152

and human nature, 118-121 Federal Reserve System (The Fed), 34,

importance of, 109-110,121 45, 53, 66,127-128,144-146. 266,

role of govemment in, 109-112,113 274

Economic value, 123 Fiat money, 116,135,146

Edwards, Robert, 59, 66, 88 Fiduciary media, 116

btticient markets ttieory, 34,164,274 Figtit or tligtit response, 201,206 85% rule, 188 Filer Schmidt & Co., 8, 9

Elliott, R. N., 66 Financial independence, achieving, 5,

Elliott wave theory, 84 21

Emotional discip hne, 70,176,191-192, Financial News Network (FNN), 60

206-209 Firm quote, 10-11,274

Emotions: Fiscal policy, 34, 39,110

as benefactors, 202-204 Floor trader, 274

evaluation of, 199-202 Focus, 228-231

and motivation, 218 Forced savings, 141

Forecasting, 30,32-35, 66,110. See also Hazlitt. Henry. 110,124

Dow Theory Hedge, 9,10, 66, 96. 275

Fractional reserve banking system, 140, High, 275

268 Holmes, Gordon. 105

Freedom, 259-261 Honesty, 194, 211

Free market economy, 118 Homey, Dr. Karen, 194, 244, 245, 269

Free reserves, 156,170,275 Hugo Securities, 13

Free will, 203,217-218 Fundamental analysis, 13,104-105,107,

275 Idealized self-image, 194,240247, 250

Futures, 275 lUiquidity, 76, 77,183

Futures contract, 275 Imagination, 250

INA Insurance, 15-16 Index futures, 275 Gambling, 5 Inflation, 16,19, 20,41, 66,110, 111,

Gamboni, secret of, 1-2 128,130.141,157-158. 264. 267.

Gaps, 77,106 275

Gartley, H. M., 97 Innovation, 35,114,117,123,125,141,

Gaylin, Dr. Willard, 201. 206 144

Glamour stock, 11,16, 275 Inside information. 184

Global beliefs, 234,238-239 Insider, 275

Glory, search for, 247-250 Institutional trading, 32, 634. See also

Goals, 216, 217 gram trading

Gordon, William, 89 Interbank interest rate, 152,153

Govemment intervention, 13, 34, 39, 64, Interest rates, 16.116,125.143.152, 66, 77,109-112,118,120-121, 153-154,158-159

127,131, 264. See also Federal Intermediate-term trend, 3,13, 37-38. Reserve Board; Federal Reserve 49, 276

System Interstate Securities, 4,12,13-14,184

Govemment notes, 116,130, 266 In-the-money, 275

Govemment Sponsored Enterprises (GSEs),Intraday trend. See Short-term trend

159 Intuition, 204

Graham and Dodd approach to stock Intuitive knowledge, 7

selection, 105,107 Investment, 33,114,117

Grant, James, 159 Investment banking, 7-8

Gray markets, 118 Investor(s), 3, 33, 37-38,62,112,181

Greenspan, Alan, 161.169 182 276

Gross market rate of interest, 139-140,

153,155-156,158,161 Jefferson, Thomas, 112-113

Growth, 17,19,126,142,263 Joe. Frankie, 14,104,179,188,197

Growth stock, 105,275 Junk bonds, 16,22,166,170, 276

Hamilton, William Peter, 30-31 Keynes, John Maynard, 111, 126,135, Handle, 176 136

Hard currency, 116. See also Money Keynesian economics, 17.110,145 Hayek, Frederick, 110,266 Knight, Gary, 188

Laissez-faire capitalism. 161, 266 Mergers, 16

Latent deficit, 159 Minimum wage. 111, 121

Law, John, 135-138,144. See also Mississippi Minor reactions, 45

Scheme Mississippi Scheme, 135-138.140.144,

Leeds, Milton, 6 146.153.154,158

Lehman Brothers, 7-8,185 Mitten-and, Frangois. 119

Leverage, , 1 , 25, 64,107,131,172, Modern Austrian Sctiool ot bconomics,

183,276 110, 266,267

Leveraged buyouts (LBOs), 1 , 22-23, Momentum indicators, 88. 6- 7

276 Monetary Control Act of 1 80.146

Liabilities, 276 Monetary policy. 34,39,110.127

Line, 39,40-41,44,54-56, 276 Money, 115-117.126

Liquidity, 3, 70,107,131,183 creation of, 140151

Livermore, Jesse, 227 Money certificates, 116

Long, 9,17, 37, 84,86, 276 Money management. 171.190

Long-term capital gains, 8 Money supply, 117,120,126.127.128

Long-term trend, 3,34, 37, 38,49. 276 Motivation. 216-219,244 Lorayne, Harry, 5, 8,185 Moving averages, 88-93, 99.103

Loss, 114 Low, 276

Lynch, Peter, 88 Natural disasters, 34

Nelson. A. J.. 30

Net reserve ratio, 150 Magee, John, 59, 66, 88 New economics, 111

Major Market Index (MMI), 53, 276 News events, market sensitivity to. 6. 76, Malinvestment, 53,143 77,84

Malley, John, 178 New York Composite Index, 103

Manipulation, 32, 63-66,276 Nominal interest rate. 141.155.158

Margin, 11,45, 64, 69,129,183,265, 276

Market(s): Offer. 62, 265, 277

chaotic behavior in, 29-30 ONeil. William J., 64.105

defined, 114-115 Open market operations. 146.148.150.

four technical phases of, 54-56 154-157, 277

subjectivity of, 66 Option(s), 8.11,277

understanding the nature of, 17,19 Originary interest. 125,139-140,142.

Market averages, 30,32-35,52. See also 153, 267. 268

Dow Jones Industrial Average; Dow Oscillators, 96-104

Jones Transportation Average Out-of-the-money, 277

Market economy, 114,129,134 Overbought, 34. 46, 57,100.105. 277

Market price, 8, 38,82 Overinvestment, 143

Market value, 123 Overproduction, 122

Marsh Block, 9,10 Oversold, 34,46. 57,100,105. 277

Matched sale-purchase transactions. Overspending, 111

155-156 Ov er-the-counter (OTC) market. 8.11.

Means values, 233 277

Mechanization, 117,123 Ov ertrading, 179-180

Parity, 83 Recession. 19,20. 31, 111, 127,131,

Pattem recognition, 6, 57 158

Pershing & Co., 6 Record keeping, 187

Personality, 232,234-239 Recovery, 20

Pierson, Lewis E., 118 Relative retum, 22

Potential wealth, 124 Relative strength, 20,31, 88,93-96. 97,

Pragmatism, school of, 93, 265 98

Premium, 8,277 Repurchase agreements (repos). 155-156

Price, 20, 99,114,117 Reserve assets, 146,147,150.152

Price controls, 120 Reserve deposits, 146

Price/eamings ratio (PE), 60, 65,105, Reserve liabilities, 146

106,164, 277 Reserve ratios, 147,151.152

Price movements, 60 Reserve requirements. 146,151-152

Price premium, 139,140,143,153 Resistance, 25,60. 61, 82,278

Price supports, 120 Retums, pursuit of superior, 21,26 -27.

Price trend, 60, 65 1 73

Primary, 277 Rhea, Robert, 12,23. 30. 31,32, 33-34,

Primary bear market, 39-41 38, 54-55,96.167

Primary bull market, 41-43 Ricardo, David, 134

Primary movement, see Long-term trend Risk, 4, 21-22

Primary swing, 16,44-45,168allocating capital with odds management. Principles, 17,19,162,189 170-174

Producer Price Index (PPI), 151,156 distributing. 164