A little bout of volatility isn't dissuading Ed Yardeni from his bullish take on stocks. The Dow Jones Industrial Average reversed course on Wednesday, hitting an all-time high before ending the day more than 400 points lower. The S & P 500 also hit a record before closing lower. Despite the shaky one-day performance, Yardeni pointed to "Dow Theory" as confirmation that the bull run still has years left in it. Dow Theory looks at the relationship between the Industrial average and the Transportation benchmark. If industrials are going higher, then transports must also rise to confirm a prolonged positive run. That's exactly what happened this week. The move to record levels on the industrials side came one day after transports set an all-time high on Tuesday. .DJI .DJT 1Y mountain Dow Industrials and transports 1yr "We are pleased to see that Dow Theory agrees with our upbeat outlook," Yardeni wrote to clients. "Such mutual confirmations have [historically] signaled more economic growth ahead." He also said the Dow could soon hit 50,000 before reaching 70,000 by the end of the decade. The Dow closed Wednesday just 2% below 50,000. Hitting 70,000 entails another 43% rally from here. Yardeni compared the U.S. economy to "Forrest Gump," the movie in which the title character runs nonstop for more than three years. "In the U.S., real GDP has been growing since the two-month pandemic lockdown recession ended in April 2020. So its run has lasted 5 years, 8 months, and 7 days so far," he said. "In our Roaring 2020s scenario, we expect the economy to continue growing through the end of the decade without a recession."
