Incorrect.
Predictions, can be tested to support or refute the hypothesis.
A hypothesis is not a theory. You test theories, not a hypothesis associated with a theory. There is no way to test the Theory of Evolution. You can't go back in time to see what actually happened.
Evolutionary theory predicts we should be able to observe evolution by natural selection in controlled, laboratory conditions.
Theories do not predict. They explain. A theory is an explanatory argument. An argument is a set of predicates and a conclusion. Nothing about evolution occurring today says that present day life is the result of life evolved from more primitive forms.
We have. In fruit flies and bacterium, species which can evolve quickly enough to observe.
That is not natural selection. That is unnatural selection. We are imposing conditions. We do the same thing when we raise dogs, pigeons, cats, horses, pigs, tulips, roses, fruit, cattle, etc.
We have even observed evolution by natural selection in real time in natural conditions - peppered moths in England.
Nope. Same moth. Just different coloring. No different from many other animals that change their color according to conditions surrounding them. Some even do it seasonally.
If we had not made these observations, it would have offered a refutation of Darwin's theory.
Argument of ignorance fallacy. Compositional error fallacy. One example does not mean all cases.
Evolutionary theory predicts
Theories do not predict. They are incapable of prediction. Prediction can only occur in a closed functional system such as mathematics or logic. It comes with the power of the proof. Science is an open functional system.
we should be able to find and observe transitional fossils,
Define 'transitional fossil'. You are using this buzzword again.
demonstrating evolutionary morphological changes between species over geologic time scales.
Define 'geologic time scale'. Another favorite buzzword of yours.
We have found transitional fossils.
Define 'transitional fossil'.
If we had not, the lack of transitional fossils would have required us to rethink our ideas the mechanisms of evolution
Argument of ignorance fallacy. It would have required no such thing.
The Theory of Evolution is not falsifiable. It cannot be tested. We can't go back in time to see what actually happened. It is a religion. Like all religions, it is based on some initial circular argument with arguments extending from that. Like any religion, there are those that try to prove their religion. This forms the circular argument fallacy (what you are doing). It is what a fundamentalist does.