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What is Dow Theory? What ifs significance of the “confirmation” signal in this theory?

What is Dow Theory? What ifs significance of the

“confirmation” signal in this theory?

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Dow Theory as a business performance indicator and a economic theory , deals with the a series of price fluctuations and movements designated to the market phases, which can be consequent and not necessarily in a same order. Likewise if one sees an advance in stock averages, it's more likely to follow up the next previous high , could resurface the history of stock performance where an investor can cash in and out. Dow has two main Averages as Industrial and Transportation, and here comes the confirmation signal in the scenario. We use this signal to confirm the movement of both the averages of indices each other high's and lows together. This allows the investor to configure which average combination best suits. This is the significance of the confirmation signal in this theory.

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