Nearly 220 exchange traded funds hit all-time highs on Wednesday. By itself, that is an encouraging statistic for the broader market, but there is more to the story.
Two of the ETFs hitting record highs were the iShares Transportation Average ETF (NYSEArca: IYT) and the SPDR S&P Transportation ETF (NYSEArca: XTN).
That has some market observers believing a Dow Theory signal has been confirmed, potentially indicating that more upside is on the way for the Dow Jones Industrial Average. IYT follows the Dow Jones Transportation Average, which is used to assess the Dow Theory.
According to the Dow Theory, IYT may still plod along as the Dow Jones Industrial Average trades above key levels. The Dow Theory stipulates that if an upward trend in one of its industrial or transportation averages increases above a previous high, it is accompanied by a similar advance in the other index.
“According to the Dow Theory, IYT may still plod along as the Dow Jones Industrial Average trades above key levels. The Dow Theory stipulates that if an upward trend in one of its industrial or transportation averages increases above a previous high, it is accompanied by a similar advance in the other index,” according to the Wall Street Journal.