Dow Theory Buy Signal?

I'd like to briefly talk about Dow theory and using the transportation index to confirm moves in the stock market. I know many people feel that Dow theory is not relevant anymore like it was years ago, but in my opinion I still find it to be very useful and profitable.

Above is a chart of the transportation index and below that is a chart of the Dow Jone's Industrials. Back in October 2007 the Dow made a new swing high but the Transportation index did not. According to Dow theory, this is a sell signal and as we all know that was the top in the stock market. Two weeks ago the Dow made a new swing low but the transportation index did not. According to Dow theory, this is bullish for the Dow.

If you look at the chart of the transportation index, you will see an inverse head and shoulders formation which is a bullish pattern.

Based on the above chart, I would have to be looking for reasons to get long stocks. If I see the Dow beginning to make higher lows and higher highs, I will look to be a buyer. I'd probably look to get long if the Dow can get above 12600. Until then I'll remain on the sidelines.