DJIA - A Reliable Indicator?

In short, the answer would be no. After all, it's just an average. While it's a famous one, it's just an average with only 30 listed stocks. It's price-weighted. It actually tells us very little. It tells us even less about the Dow itself, unless you dig through the information.

Imagine... last week the Dow was up, but only 8 of the 30 stocks hit new highs. If you owned the wrong 8, you didn't do so well. If you owned the EFT, the Diamonds, you did quite well.

Most investors' portfolios don't coincide with the Dow, so for most investors, the DJIA is just a number. Nothing more. Nothing less.