It’s one of the oldest theories on the market and so far in 2014, it’s been very good for investors. The Dow Theory holds thata bullish trend is confirmed when the Dow Jones Industrial Average and the Dow Jones Transportation Average are both making new highs.
And, right now, both industrials and transports are at their records. But, while the industrials are up 2 percent year-to-date, the transports have returned more than 10 percent. “When you have a lot of economic activity, you’re going to have transportation activity,” explained Gina Sanchez, founder of Chantico Global.
Underlying the gains, particularly in the transport index, is the persistent low-rate environment, according to Sanchez, a CNBC contributor.
You can see the full “Talking Numbers” segment below:
Related: iShares Dow Jones Transport. Avg. (ETF)(NYSEARCA:IYT), Dow Jones Transportation Average(INDEXDJX:DJT), Dow Jones Industrial Average 2 Minute(INDEXDJX:.DJI)