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.--Kevin