Jack Schannep, editor of TheDowTheory.com and Schannep's Timing Indicator, issued a buy signal last night based on the Dow Jones Transportation Average's move yesterday above its July 31 "bounce high" of 2390. Yesterday, the transports rose 3.6% to 2432.21; lately they were up 0.3% to 2440.34.

"Therefore, the Dow Theory goes to 100% invested at 8957.23 from the 25% invested at 8019.26 on July 19 for an average entry level of 8722.74," Schannep wrote.

According to some purists, both the industrials and transports would have to close at new all-time highs to re-establish a bullish "Dow Theory" signal, something that's a long, long way off. But Schannep's interpretation is a buy signal is triggered when market lows occur on capitulation selling (which he, like many, believes occurred in late July), followed by a bounce, a pullback to above the prior lows (which occurred in early August) and then a break higher to above the bounce highs (the Dow industrials had already pulled the trick on Aug. 9 at 8745.94.)

For the record, Richard Russell, editor and publisher of Dow Theory Letters and considered by many the dean of Dow Theorists, disputed Schannep's buy signal when I called Thursday. "The big picture is we're in a bear market and are going to stay [in it] until we see great values again," Russell said. "That's going to take time."

Notably, Schannep's own "timing indicator" is still at 50% invested at 8019.26 on July 19. "The momentum needed to complete this buy is still in the process of forming," he wrote.

Schannep employs a combination of Dow Theory (his interpretation) plus a proprietary timing indicator to generate a "composite" timing indicator, which he last night lifted to 67% invested from the 50% invested on July 19.