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Paul Hanly
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Paul Hanly, B.Comm, Ll.B., ACA, has 20 years in banking and finance. Paul has experience in major corporate workouts after 92 recession and commercial real estate bust in Australia.
My blog:
Thorts On Investing
  • Safe Buy Time? Coppock still falling! 0 comments
    Jan 18, 2012 10:06 PM
    The Coppock Indicator was specifically designed as a signal to indicate a very likely safe and profitable buy after a significant downturn in markets. The signal occurs when the month end indicator turns up from below zero. See http://en.wikipedia.org/wiki/Coppock_curve

    As at 13 or 14 January as well as at 31 December the Coppock is still trending down in S&P 500, Nasdaq 100, UK FTSE 100, Japan Nikkei 225, Chinese Shanghai Composite and Australian All Ordinaries, however it is not below zero for S&P 500, Nasdaq or UK FTSE, although close to negative for UK FTSE and falling very fast for NASDAQ.

    I have also looked at a modified (170,150,20) MACD (Moving Average Convergence and Divergence) more suitable for divining long term trends using Incredible Charts free version. See http://en.wikipedia.org/wiki/MACD

    My MACD indicates that there are clear BUYS for S&P 500 and UK FTSE (in local currencies).

    Using my MACD for USD denominated similar instruments it indicates a clear BUY for the FXI, the US listed MSCI ETF for China and hints at probable emerging buy signals for EWA (Australia), EWU (UK) and (NYSEARCA:EWJ) Japan.

    Coppock Summary

    Coppock is always late but for the Australian All Ordinaries it has been a good signal 13 of the last 15 times with an average 24 monthly return of over 20% so it is useful for market timing BUYs. See http://thortsoninvesting.blogspot.com/2011/12/coppock-bottom-picking-performance.html

    For those who trust Coppock start looking to BUY stocks which have given a favourable Coppock signal, particularly in markets as they also generate a Coppock BUY signal as a whole.

    While the fundamentals for Europe look appalling on current German and ECB policy settings, that could change very quickly.

    For the Australian All Ords, a fall of over 6% in the first month after a buy has reliably indicated a False Coppock signal.


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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