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After growing up in abject poverty and at times homeless, I taught myself the basics of economics and finances in the business department of the San Francisco Public Library. I have worked for firms such as Bear Stearns, The Federal Reserve Bank of San Francisco, and as a subcontractor to Fannie... More
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  • Coppock Curve Only Indicates Buy Signals, Not Sell 0 comments
    Oct 19, 2009 12:02 PM
    It has been proposed by some that the Coppock Curve has given both buy and sell signals for individual stocks and indexes. However, it is my understanding of the Coppock Curve that it is strictly for the purpose of giving buy signals. Sell signals are purely coincidental if they occur at all.

    Drawing from Mr. Coppock’s own words in Barron’s October 15, 1962 article, Mr. Coppock states that, "It [Coppock Curve] gives a so-called buy signal."(page 5) Mr. Coppock goes even further to state that, “Because well-timed buying is far more difficult for the nonprofessional investor than timely selling, it is best to think of the curve as a very long-term buying guide. Its formula was devised for that type of use.” (page 5,16)

     

    In James Dines’ 1972 book Technical Analysis (page 377) There is not mention of the Coppock Curve as being able to provide a sell signal or eminent market slumps. Any mention of the Coppock Curve was with the ability of the Curve to “pinpoint the start of new trends and enable investors to select future market leaders.” (page 378)

     
    There seems to be no evidence that would suggest that the Coppock Curve should be used to determine potential declines. Instead, the Curve should only be tested on its ability to accurately call the bottom in a given stock or index.
    Themes: indicators
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