Every week we pick up an example of Dow theory in action. It's quite uncanny.

Commonwealth Bank announced a record profit earlier this week. So what do you think happens to the chart in response to this ? It suffers a correction of course.

Look at the action on Tuesday, huge range for the day, closed on its low and big volume. This is the day the news was made public.

Again yesterday, a gap down on even bigger volume. This is the difference in how traders impact on the stock, as distinct from longer term investors.

No doubt you know who, would be recommending to buy on the day of the announcement.

Our point is to be aware of Dow Theory.