10.1 How did technical analysis evolved?
Evolution of Technical Analysis
Technical analysis, actually, was the brainchild of Dow Jones, editor of the Wall Street Journal, at the turn of the last century. While recording price movement of various securities for predicting future prices, he observed that most stocks move in tandem with the market, going up when the market goes up and vice versa. In order to interpret market behavior, Dow, therefore constructed two indices, currently called Dow Jones Industrial Average (DJIA) and Dow Jones Transportation Average (DJTA). His theory later on was interpreted, expanded and refined by technical analysts Hamilton and Rhea. Over the period, new additions were made to this treatise and thus the modern day technical analysis came about.