Old Wall Street Investment Theory Indicates Potential for Increased Rotation and Gains in 2026

Written by Emily J. Thompson, Senior Investment Analyst

Source: CNBC

Updated: Dec 15 2025

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Source: CNBC

Market Performance: The Dow Jones Industrial Average reached new highs due to a rotation out of technology stocks, with both the Dow and the Dow Jones Transportation Average showing positive trends.
Dow Theory Confirmation: According to the Dow Theory, a bull market is confirmed when both the Dow and the Transportation Average hit new records simultaneously, which is currently being observed.
Transportation Index Outlook: The Dow Jones Transportation Average has shown a "head-and-shoulders bottom," indicating potential record highs in 2026, as noted by Bank of America's Paul Ciana.
Volume Trends: Increasing trading volumes alongside rising prices are essential for confirming the uptrend in stocks, with the Dow's volume showing improvement since August and this year's transportation index volumes surpassing previous years.

About the author

Emily J. Thompson

Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.