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A Dow Theory ‘Buy’ Signal: Yamada

Dow Theory along with broader market gains suggest that stocks are a "buy," Louise Yamada of Louise Yamada Technical Research Advisors said Tuesday on CNBC.

The Dow Jones Transportation Average closed at a new all-time high of 6,136.72, suggesting a broader bull market.

"But when the Dow joins it, and they both make a new high, as they did today, you're in a much better position in terms of the Dow Theory bull market," she added.

The Dow Jones Industrial Average topped its 2007 record to close at an all-time high of 14,253.77.

On "Fast Money," Yamada pointed to major tops in stock charts of bull markets in 1998 and in 2007.

"Today, you can't really say that," she said. "You have some extended names. You don't have a plethora of major tops, and you do have some stocks that are coming out of basis, as particularly as we've seen in the Dow."

"The point is that we have momentum confirmation."

(Read More: Will Transports Drive the Dow Higher This Year?)

Yamada suggested that near-term, stocks were headed higher, with a correction down the line.

"Generally, you would anticipate some kind of negative divergences coming into place before you get a more serious decline. You're in an uptrend. The uptrend is still intact," she said. "The November low is the key support level at this point, so it's a question of — yes, you're going to get a pullback at some point, but the question is from what level."

(Read More: How Pros Are Trading After Dow's High)

Trader disclosure: On March 5, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Steve Grasso is long AAPL; Steve Grasso is long ASTM; Steve Grasso is long BA; Steve Grasso is long GOOG; Steve Grasso is long GDX; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is long VLO; Steve Grasso is funds long HPQ; Steve Grasso is funds long ZNGA; Steve Grasso is funds long HD; Steve Grasso is funds long BRCM; Steve Grasso is funds long USG; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Dan Nathan is short SPY; Dan Nathan is short QQQ; Dan Nathan is long AMZN APR 240/200/160 PUT FLY; Dan Nathan is long MS APRIL 22 PUTS; Dan Nathan is long BBRY MARCH/APRIL 14 PUT SPREAD; Dan Nathan is long CAT APRIL/MAY 85 PUT SPREAD; Jon Najarian is long AAPL; Jon Najarian is long JPM; Jon Najarian is long WFC; Jon Najarian is long CSCO; Jon Najarian is long QCOM; Jon Najarian is long NFLX; Jon Najarian is long RDN; Jon Najarian is long AXP; Jon Najarian is long AMTD; Jon Najarian is long YELP; Jon Najarian is long SWN; Mike Harris is long Brent; Mike Harris is short Gold.

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