88. Which of the following tenets of Technical Analysis is derived from Dow Theo
ID: 2806501 • Letter: 8
Question
88. Which of the following tenets of Technical Analysis is derived from Dow Theory? A) Price movements of the averages are completely random B) Price history is of little value in forecasting trends C) The averages discount virtually everything D) All of the above 89. The technician who was perbaps the first person to use the words Head and Shoulders, Triangles, and Flags to describe chart formations was: A) Charles Henry Dow B) Colonel Leonard P. Ayers C) Richard W. Schabacker D) Joseph Granville 90. The technician who was first person to cover indicators such as on-balance volume, the 200-day moving average, and the Barron's Confidence Index was A) Charles Henry Dow B) Colonel Leonard P. Ayers C) Richard W. Schabacker D) Joseph GranvilleExplanation / Answer
Answer:
88) c.
The averages discount virtualy everything.
It means that the market shall consider all the knowable factors which have impact on the demand and supply where as it shall not consider certain factors which cannot be determined such as calamities like earthquakes etc, thus such factors shall be ignored. They discount the occurance of such activities.
Option a) is incorrect since the price movement are not random, the volume should confirm to the trend in dow theory. The volume would move higher when the price moves higher and vice versa. It has direct relationship with price.
Option b) is also incorrect since price cannot be considered as historic, real time prices are considered.
89) A) Charls Henry Dow
He was the first person to use head and shoulder, triangles and flags in the formation of a chart or graph which indicates the movement of price.
90) D) Joseph Granville
In 1959 Joseph Granville published articles on Barron's confidence index and later he has written various articles and books on on-balance volume, the 200-day moving average and various other topics.
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