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Despite charges that the Dow Theory is outdated, the transports index have proven itself once again.
Despite charges that the Dow Theory is outdated, the transports index have proven itself once again.
(BRENDAN MCDERMID/REUTERS)

markets

Wait for this key index to stabilize before adding to U.S. stock holdings

Dow Theory is an older school of technical analysis in which one of the most important tenets is that transportation stocks – specifically the Dow Jones transportation average – are a leading indicator for the market as a whole. In recent months, despite numerous charges that Dow Theory is outdated, the transports index has proven once again that investors ignore these stocks at their peril.