Monthly Archives: January 2017

The Coppock applied to the current market

Consider the chart of the All Ords Index. In about July of 2016 a positive Coppock signal was given (shown below by the green arrow). This indicated that investors should be starting to buy stocks. It is worth looking at charts of the major stocks to note that most stocks started strong positive moves at about that time.

What perhaps makes the July Coppock signal more persuasive is that a Coppock entry signal was evident at about the same time during 2016 for almost every major world index. One of the very few exceptions was the Nasdaq index where because of the very bullish nature of that index, the Coppock failed to move below the zero line.

The recent widespread occurrence of the Coppock signal might suggest that there is a high probability that all world markets will be positive this year. But that is a matter of probability and… Continue reading

The Coppock indicator and the Australian market.

The Coppock indicator is a long-term momentum oscillator based on rate of change. It was developed to identify long-term investment opportunities in the S&P 500 and Dow Industrials indices. The signal is very simple. A buying opportunity is identified when the Coppock indicator is negative and becomes more positive (but crossing the zero line is not an entry signal).

From looking at many charts, it is evident that there is little difference in subsequent movement of the index whether there is a deep or a very shallow Coppock trough. The Coppock is a lagging indicator and the signal is very general and often several months late. A more precise entry signal is provided by a monthly MACD crossover but this signal is usually later still than the Coppock.How useful is the Coppock signal? The monthly chart of the All Ords Index below, shows that there were nine Coppock entry… Continue reading

Market direction in 2017?

Even though the equity market is looking expensive most commentators are very positive about prospects for 2017. There are however several things that could change the mood of this market.

The following are some economic/political risks for 2017. The questions to ask are:

  • will the failure of Italian banks cause the next economic crisis?
  • can China solve its more serious problems and continue to grow?
  • how will further crises in the Middle East affect world growth and stability?
  • can the European Union handle political instability and more refugees?
  • what impact will a Trump presidency have on world stability and growth?

The above are the critical questions to ask if we try to understand the trend of equity markets in 2017. Of the five points, perhaps the critical one is the unknown Trump factor. Trump remains an enigma with policies aimed at improving job prospects and profitability in the United States… Continue reading

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