Dow Theorists don't need to wake up yet, but might pay closer attention to this rally

Dow Theorists will be interested to know that today's strong move up does not (yet) trigger a trend change from the perspective of Dow Theory. This is because neither the Dow Industrials, nor the Dow Transports, is moving above the January highs (see below). However, we must acknowledge that the possibility of that happening has increased. This is because the Industrials have now pushed above a .786 Fib retrace to those highs. The Dow Transports may do likewise. On the other hand, they both still face resistance from their 200-day moving averages. If they can do that, and get above their January highs, then Dow Theory would acknowledge the rally is something more significant.

It just has not happened yet. I have to ask myself, since I am thinking that the rally is more part of an ending movement than a beginning movement with a focus on the S&P 500 somewhat higher (perhaps 953), what happens if that Dow Theory level of the January highs gets broken? Will that be enough to add more strength to the rally? It would at least be worth folding in with the other analytical tools we've got to work with.

So Dow Theorists needn't awaken just yet. But they should sleep with one eye open, so to speak - to keep that eye on whether or not those January highs get taken out.