Technical Analysis of the Financial Markets

Reviewed by Diario de un Inversor · UpdatedJune 13, 2026

Our review

John Murphy wrote the most widely consulted technical analysis manual in the English-speaking world, and it is not hard to understand why: the coverage is systematic, the expository order is impeccable, and the level of detail on each tool — from Dow Theory to the Stochastic and RSI oscillators — has no equal in a single volume. The latest edition incorporates analysis of futures, currency markets, and intermarket relationships, considerably broadening its utility. "The bible" is the nickname it has earned in the technical analysis departments of banks and funds, and that position is deserved as an encyclopedic reference work. Its main limitation is one it shares with the entire discipline: technical analysis assumes that price history predicts the future, a premise that modern financial theory challenges rigorously. Murphy does not enter that philosophical debate, which makes the book more pragmatic but also more dogmatic than would be ideal. It is a reference manual, not a linear read: its density of content makes it difficult to absorb in one sitting but invaluable as a permanent reference.

Key takeaways

• Dow Theory establishes the fundamental principles on which all modern technical analysis is built.
• Price patterns (head and shoulders, double tops, triangles) have volume implications that validate or invalidate them.
• Intermarket relationships (bonds, equities, commodities, currencies) allow anticipation of sector rotations.
• No indicator works in isolation: confluence of signals increases the reliability of the analysis.

Fact

The book was first published in 1999 and has become an official reference text for the CMT (Chartered Market Technician) certification program of the CMT Association.