Gallery: Four Charts That Show The Market Is Set For A Move Higher

The good news (for bulls)

The transportation indices

The old theory goes that if the transports are not performing, the industrials can't either, as if nothing is being shipped, nothing is being sold.

It is therefore reassuring to see both the FTSE All-Share Industrial Transportation and America's Dow Jones Transports indices start to regain their momentum, although the potential 'double-top' pattern on the UK indicator needs to be watched.

Bullish investors will feel happier if the FSTE All-Share Industrial Transportation index can steam higher and a lot less comfortable if it rolls over once more.

The good news (for bulls)

Small caps

Market minnows are an excellent indicator of risk appetite – they tend to outperform when investors are bullish and fall faster than the broader market when they are bearish.

The UK's FTSE Small Cap and the US Russell 2000 are both moving higher again and bulls of equities will want to see these benchmarks sustain their recovery from February's sharp sell-off.

The good news (for bulls)

Market volatility

Volatility can be the friend of the investor – it can provide chances to sell stock expensively or buy it cheaply – but history shows that stock indices progress best when they make serene progress and a series of modest gains and tend to fare less well when trading is choppy and there are big swings up and down. 

The FTSE 100 moved higher with a minimum of fuss in 2017 when there were just 17 open-to-close movements of more than 1% in the index throughout the whole year.

That was the lowest total since 2005’s reading of 18 and the UK stockmarket advanced smartly for a further 18 months after that.

The good news (for bulls)

Valuation – and especially the dividend yield

In the end, the valuation paid for an asset is the ultimate arbiter of the investment returns made on it. Valuation metrics using forecast earnings can be unreliable, as those forecasts are often wrong, so dividend yield can offer more comfort.

Management teams are reluctant to cut the shareholder payouts as this tends to hit a share price hard and potentially their own wallets.

At the time of writing, the FTSE All-Share is yielding 3.82%, compared to a 10-year Gilt yield of 1.50% - that's a 232 basis point (2.32%) premium.

That may be less than the 294 basis point premium on offer in July 2016, but the All-Share has only twice previously offered a premium yield of 2% or more since 2008 - and on both occasions the stockmarket promptly made healthy gains. 

The not-so-good news (for bulls)

Dr Copper

The industrial metal is a great barometer for global economic health. Its recovery from a six-year low in January 2016 looks to have rather fizzled out and the metal has lost some 6% of its value in 2018.

A fresh advance in copper would help to reaffirm investors' faith that the currently dominant (but increasingly consensus) inflation/reflation trade is the right one, while further weakness would question whether investors were correct to dump their bonds and defensive stocks (such as utilities) and pile into bombed-out value, turnaround and cyclical stocks quite so quickly.