FedEx creates a hurdle for stock market bulls with the Dow at record highs

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Stock Markets,Dow Jones Industrial Average,Dow Jones Transportation Average

The Dow Jones Industrial Average surged to a record above 42,000 on Thursday. That rally may not be sustainable, based on the 'Dow Theory.'

The Dow Jones Industrial Average surged to a record above 42,000 on Thursday. That rally may not be sustainable, based on the venerable " Dow Theory ." The century old Dow Theory looks at the relationship between the Dow Industrials and the Dow Transports , and argues that market trends must be confirmed by both groups. In other words, if the Dow Industrials are going lower, then Transports most also be falling to confirm a prolonged negative run.

FDX 5D mountain FDX year to date To be sure, other market trends paint a more positive picture. "SPX closed above 5700 yesterday, and the equal-weight RSP also closed at a new all-time high. Therefore, the 'false breakout' on the known FOMC event we thought would transpire clearly didn't play out," BTIG chief market technician Jonathan Krinsky wrote. "In the last week, we have seen new 52-week highs for every sector except Tech and Energy.

 

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