On 15 May, the UK All-Share Index weekly chart gave a Coppock signal. The following week, the FTSE100 weekly chart also signalled. The week after that, the Dow gave a signal. How significant are these signals? Answer: very. For me, it means a new bull market has begun. To put things in context, the Coppock Indicator - which signals the start of a new bull market - has only produced one false signal on the UK stockmarket in the last 40 years. You can find more details on the indicator in my Inside Guide to Indicators elsewhere on this site. The last signal was six years ago, and a very good rule of thumb is that the longer the interval between chart signals, the more reliable they are. So I don't think we've waited six years just to get a false signal.
 
However, excellent as Coppock is, it's still only an indicator. What I really want to see now is price-based evidence on the Point & Figure chart in the form of a significantly higher low compared with the March lows. If we get this on the Dow, then we will have the makings of a head & shoulder bottom formed over quite a long time, exactly the same as at the market bottom of 2003. Coppock was also present there. If we see the higher low on the FTSE, we would also have a head & shoulder bottom, albeit one with a double left shoulder which is just as valid.
 
At the time of writing, the Dow is at 8763 and the FTSE at 4438. The Dow has recently completed a congestion area and has moved up out of it which is to be expected as the move into it was up. FTSE is slightly behind, but almost certain to follow upwards. Both markets have resistance ahead, the Dow at around 9000, and FTSE at 4625. Both rallies could be halted here, and if we see a significant retracement from those levels, two things happen. First of all, those levels will then become necklines for potential head & shoulder patterns, and secondly, we are in position for our higher low, which is really just the right-hand shoulder forming. If we were then to break those necklines, that for me would be the decisive action that clinches the bull case. I realise it's thinking several steps…

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