Dow Theory Confirmed as of Yesterday's Close

I am not sure if it's a moot point by this stage of the rally, but for those who still use Dow Theory - yesterday's close on the DJIA was a confirmation of good times ahead.  Disclosure: I only follow this measure very loosely.

Via Bloomberg:

• The Dow Jones Industrial Average yesterday rose above the midpoint of its last bull market in a positive sign for U.S. stocks, according to Richard Russell, who has studied the average since 1958.  The advance by the 30-stock Dow also was a bullish signal for followers of Dow Theory, which holds that moves by the Dow Jones Transportation Average must be “confirmed” by the industrial average, and vice versa, in order to be sustained.
• Yesterdays's close was the highest for the benchmark since October 2008 and its first close decisively above the 10,725 midpoint of its 94 percent advance during the bull market that started in 2002 and ended in 2007.
• A close by the Dow above the midpoint is “a big positive for equities,” Russell, the 85-year-old editor of Dow Theory Letters, said in a telephone interview yesterday. “I would probably turn somewhat bullish.”
• The confirmation by the industrial average of recent gains by the transportation average “would also be very bullish,” Russell said. The 20-stock transportation average, whose biggest components include FedEx Corp. and Union Pacific Corp., rose to a new high for 2010 on March 9 and has continued to advance every day since. The transports gauge has climbed for 10 straight days, its longest streak since 1993.
• “I don’t want to be in stocks unless, or until, the Dow closes decisively above 10,725,” Russell wrote to subscribers of his biweekly newsletter March 16.
• Gold is still a better investment than U.S. stocks because it offers protection from currency devaluation, Russell said. Gold futures for April delivery climbed to $1,124.20 an ounce yesterday and have rallied 21 percent over the past year.  “The gold bull market is the strongest metric around now after going up for nine years,” he said. “If stocks had been making higher highs for nine years in a row there would be a frenzy for stocks. There’s very little excitement about gold.”