Stock market indicators are a bit like fashion. Not every indicator is in style all the time. Bell-bottoms were in style in the 1960s, but not today. Dow Theory was also in style in the 1960s. It is the dinosaur amongst indicators, with roots going back Charles Dow's Wall Street Journal editorials in the late 1800s. But is it still valid today?
I think it still has some merit, however it is overly complex in relation to its performance. Simple, very long term(!) moving average crossovers (say, 50-100 days for the fast and 200-400 days for the slow line) will generate similar entry/exit signals and yield pretty similar results - i.e. a worse absolute performance than buy and hold but a better risk-adjusted performance.
Whatever works for you, playa . it's kind of hard to say to do this, or do that. -- and if we are wrong, we look like the dumbass. the markets are part art, part science. -- not to mention the element of luck. I like to think of every trader...as a magician or alchemist...working their magic or formula.
===Should you ignore or explore the Dow Theory sell signal?=== One should not confuse the market theory with the trading method. The signals should be result of the method not the theory. The theory can be utilized in building the method, but its in no way its substitution.
as for the dow theory usefulness, everything is useful in the right hands to a certain degree, but not everything is needed.