Dow theory was invented by Charles H. Dow by observing the market rather than the company. He observed the supply and demand of the stock along with its price movement and the volume traded. It requires daily charts for min period of two years. Then major tops and bottoms are identified. Higher bottom to Higher top with significant volume would indicate bullish trend. Lower bottom to lower top would indicate a bearish trend. This theory would indicate only the trend and therefore only be used in long term investment. It is not useful in daily trade.