a. One misses the large gain due to conservative nature of a trend reversal signal i.e. uptrend would reverse when stock prices make lower top-lower bottom formation and
downtrend would reverse when stock prices make higher top-higher bottom formation.

b. Charles Dow considered only two indexes namely Industrial and Transportation which is not major part of the economy today. Technology and financial services i.e. banking constitutes major part of the economy today. We have seen in 1998-1999, one sided rally in Nifty led by technology stocks. In this rally none of industrial stock participated and if one waited for buy confirmation from Industrial and Transportation indexes then one must have missed the classic bull run of technology stocks.