Briefly describe the main points, advantages and disadvantages of Dow Jones theory.

Answer: The main point of Dow Jones theory is that although the stock price is changeable, it always follows a certain trend. This certain development trend can be found in the changes of some representative stock prices in the stock market. Knowing this trend, investors can predict the trend of stock prices in the stock market by studying the past trajectory of these stock prices.

As a theory to predict the future fluctuation of stock price, Dow theory has many reasonable components, which can help investors explore the changing trend of stock price and guide investors to carry out effective investment activities. However, Dow theory also has some shortcomings, which are as follows: ① Dow theory trusts the two average lines it uses too much. (2) Dow theory can't predict the highest and lowest points of stock price. (3) Dow theory pays too much attention to the long-term investment trend. ④ Dow theory can't help investors to choose stocks.