| | | That’s not all, folks! There is the Coppock Curve (or
Coppock Guide) so-called Killer Wave. For those of you not acquainted
with the Coppock Curve, it is constructed by adding an 11 month rate of
change to a 14 month rate of change on the S&P (or any other index),
then calculating a 10 month weighted total of that sum. It has been one
of the most spectacularly accurate long term buy indicators ever
devised. Its last buy signal was given in January 1995. A buy signal is
generated when the Coppock Curve turns up from below the zero level.
It’s that simple. The beauty of the Curve is that it tends to move above
and below zero very smoothly with little or no hesitation. The Coppock
Curve was not designed to give sell signals, but an analyst with A.G.
Becker, Don Hahn, discovered long ago that if the Coppock Curve turned
up by more than 10 points within two months of a bottom above the zero
level, it was called a killer wave. Up to now, there had been only three
killer wave signals given over the past 35 years. They came in November
1968, September 1972, and July 1987. A double Killer Wave signal has now
been given in both February and May 1997. The three prior signals led to
three of the largest declines of the past 35 years. The current signal
now calls for an equally ominous decline. The timing of the decline is
not a pinpoint affair, but as you can see from the dates of prior Killer
Wave signals, they preceded the final tops: 1)just days later (December
1968), 2) 3 1/2 months later (January 1972), and 3) one month later
(August 1987). Three instances are not, of course, statistically
significant but the suggestion from those prior three occasions is that
the top should be seen between June and September 1997. The past three
Killer Waves preceded declines averaging 34.4%. We believe that would be
a minimum type decline expected from the next top.
spiritoftruth.org
The only four false signals under this guideline were in 1938, 1941, 1947, and November, 2001.
The Coppock Guide has never been noted for timely sell signals. The reason is that market tops are usually slow, rounding formations in which momentum (and the Coppock) peak up to a year or more ahead of the market. Except, that is, in a few cases...
moneyshow.com
Chart:
moneyshow.com |
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