Old Time Dow Theory Sees Clues to Stock Market Rally in FedEx Earnings

FedEx Corp.’s earnings on Thursday are likely to provide some clues about how much further the stock market rally can go after its latest record run, at least according to the stock market thesis called the Dow Theory.

Coined around the turn of the 20th century by Charles Dow, who invented the Dow Jones Industrial Average and the Dow Jones Transportation Average, the Dow Theory states that a move by the industrials index must be confirmed by the transportation index, or vice versa, for a true market trend to take hold. That hasn’t happened this year, as the main Dow benchmark has hopped from record to record while the transport gauge has languished.