Just a few months ago, there was a lot of concern that "
In brief, the "Dow Theory" says that
Last fall, while industrial
But since the end of December, trannies have surged +10 percent, while the Dow is up about +6 percent. Here's the chart for trannies:
As a result, Dow Theorists are now saying a buy signal has been triggered:
"The Dow Jones Industrial Average hit a new bull market high Friday of 13649 (and is currently adding to that), surpassing its fall peak and joining the Dow Jones Transportation Index (which is at all-time high territory at 5739) in sending a clearly bullish sign to the market," WSJ.com's Paul Vigna writes.
Forex.com editors believe that even if the signal was not triggered Friday, it could still be coming soon:
Presently, the Dow Industrial average is above its previous Q1 2012 highs, yet it still remains below the prior highs from September/October around 13,660/65. While this does not guarantee that equities will continue to move higher over the coming days and weeks (since the Industrials can still falter and make a lower high), it does project a rather bullish signal.
For what it's worth, the godfather of Dow Theory, perma-bear
Russell, who is editor of Dow Theory Letters, argued over this past weekend that the Dow industrials must close at a new all-time high above 14,164.53 to confirm the Dow transports — not at just a new bull market high.
These conflicting opinions show that Dow Theory is as much an art as it is a science.
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