Through all the Uncertainty, Dow Theory has hung in There
April 22, 2026
If we take a big step back and try to remember what was unfolding, as an important central theme within the stock market, prior to the launch of Epic Fury back on February 28th, we would recall that a broadening stock market landscape had been unfolding since November of 2025.
In the months following the broadening shift back in November, we had shared various perspectives on that important development.
The significance of that structural stock market development was the fact that collective market participants were notably bidding up the broader stock market landscape. Coming out of the significant 2022 market downturn, a broadly performing stock market was sorely absent. This was a historical aberration for a new bull market launch.
Historically, when new bull markets begin after a notable downturn, they are robust and filled with upside performance opportunities across the broad landscape of the stock market.
Post-2022, this was not the case. Rather, the performance was concentrated in select areas of the stock market. Such a market storyline can be thought of as a narrowly performing market.
Historically speaking, narrowly performing market backdrops, given time, are ripe for problematic pricing behaviors, given relatively so few companies are experiencing upside bids in their share prices. Think of this as an 8 cylinder engine whereby only 5 cylinders are functioning properly. Given time, the overall engine will present systemic problems.
Bringing this up to somewhat recent weeks, back in mid-February we shared an edition that continued with our observation of the broadening stock market landscape. For that edition, we addressed what is known as Dow Theory.
At that time, it was quite interesting to be able to offer such a topic because a functioning Dow Theory landscape had also been sorely missing, post-2022.
Dow Theory offers that the stock market is offering a healthy general landscape when either the Dow Jones Industrial Average or the Dow Jones Transportation Average advances above a previous high point.
Importantly, once one of the two eclipses a previous high point, Dow Theory confirmation then arrives when the other joins in by advancing above a previous high point as well.
Keeping this simple, it is all about trend. A healthy market leaves in its wake a series of higher highs, i.e., a defined uptrend. This brass-tax Dow Theory definition was unable to present itself, which offered an additional signal of how narrow stock market performance had been, post-2022.
What was most noteworthy in our mid-February Dow Theory edition was the behavior of the Dow Jones Transportation Average.
We noted how this index had been missing in action, if you will, for four full years! That is a long time of no performance when placed within the context of a general bull market backdrop, albeit a narrow bull market backdrop.
With this edition’s general step-back view of the stock market’s central theme prior to February 28th, let’s take a look at messaging from collective stock market participants through the lens of Dow Theory, with a particular focus on the Dow Jones Transportation Average, post-February 28th.
Click For Larger View: https://schrts.co/YNaHQvjS
The above is a 5-year chart presented on a weekly basis for the Dow Jones Transportation Average. The 5-year view gives us some perspective on what has unfolded post-Covid. The weekly chart takes out a lot of daily trading noise, as each bar within the chart represents one full week.
The above is the same chart that we shared in our aforementioned mid-February edition. At that time we emphasized, via our two red horizontal lines, how this important index was unable to trend (think traded in a large range) for four years.
Our small blue arrow drew attention to a new high breakout that had finally occurred, and with that, a positive Dow Theory confirmation signal with both the Transportation and Industrial indices hitting higher highs.
The question then was, could this hold?
This is one of many questions we have been focused on monitoring for our market operations post February 28th, as uncertainty became the operative phrase for the stock market. Could this Dow Transportation strength hold, in particular against the unknown energy pricing landscape through March and now April.
Per the upper right portion of the chart, we can see a short-lived dip below the red line whereby it was depicting a failing new trend attempt. Most interesting was the attempt at a trend failure, which then course-corrected quickly and aggressively, whereby it reasserted dominating trend strength since.
In fact, per the chart, we can clearly see the rapid trend reacceleration the transportation index has put in, which has easily eclipsed the previous high point from our mid-February edition. This is impressive pricing behavior for this important index within the Dow Theory signal.
Interestingly, the laggard is now the Dow Jones Industrial Average in that it has, to this point, been unable to attain its previous high point of 2026, let alone exceed it.
Regardless, the Dow Theory signal that we presented back in mid-February has hung in there quite well, all things considered, since the geopolitical upheaval began on February 28th.
For its part, the Dow Industrial Average, as of this writing, is less than a thousand points away from its previous high point. Percentage wise, that is not far away.
The ongoing observation point, through the Dow Theory lens, is whether the Industrial Average will be able to attain its previous high point and then exceed it, whereby it would then join the Transportation Average with a new high breakout.
Through this, if it can occur, it would then continue to point to a Dow Theory confirmation signal that walks us back to a reassertion of a broadening stock market backdrop. Time will tell her story on this front.
For now, all things considered, Dow Theory has hung in there pretty well over the previous couple of months.
A Dow Theory confirmation signal, from here, would be a component of signaling participants are back on the broadening theme they put in place back in November.
I wish you well….
-Ken from Mind Your Stops