Dow Transports Confirms on the Upside

[HenryTo]

The Dow Transports made an all-time closing high at 3,830.97 yesterday, surpassing its former high of 3,811.62 made on December 28, 2004. This confirms the new four-year high of the Dow Industrials on the upside.

Under a strictly mechanical intepretation of the Dow Theory, this is bullish for the stock market. Readers should keep in mind, however, that VALUES form the basis of all Dow Theory. Second to that is the notion of the primary trend, and this author still believes we are in secular bear market.

On a different note, the ability of both the Dow Industrials and the Dow Transports (which are more sensitive in general to oil prices than small or mid caps) to overcome former highs in the face of an oil price of >$53 is simply amazing.