It certainly looks that way Friday morning, with the Dow Jones Industrial Average (DOW:DJIA) finally surpassing its February closing high of 12,391.25 — after having failed to do so in its two previous attempts.
In fact, if the Dow can hold on through the close and remain above that previous high, then the venerable Dow Theory will have flashed an all-clear signal for the market.
The Dow Theory, of course, is the oldest stock-market-timing system that is still in widespread use. It focuses on the action of both the Dow industrials and the Dow Jones Transportation Average (DOW:DJT) .
Dow Theorists focus particular attention on how these two benchmarks behave after any market correction. It’s considered a bearish omen if either or both fail to surpass their pre-correction highs, and it’s an all-clear signal when both eclipse their respective highs.
Friday is the third consecutive day in which the market has come close to generating such an all-clear signal. The transports finally surpassed their previous high as of Thursday’s close, and the industrials came awfully close on both Wednesday and Thursday — though in each case, they fell short by the close.
Many would have found it disappointing if the Dow Jones Industrial Average went into the weekend having failed a third time.
For now, at least, it looks as though the bulls can save their disappointment for something else.