Category Archives: Coppock Index

Coppock Curve Q & A

Posted on April 1, 2010 by | Leave a comment
A reader asks:
"Isn't it possible to determine good times to sell stocks using the Coppock Curve?"
Touc's reply:
My understanding of the Coppock Curve is 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' book Technical Analysis (page 377, 1972), there is no 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.
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Market Checkup: Coppock Curve

Posted on March 31, 2010 by | Leave a comment
It's been quite some time since we made an update to the Coppock Curve. The curve or index moved into positive territory in January 2010. Let me remind you that the Coppock Curve is only a buying indicator and tells us nothing about selling. For an indicator to become bullish, the curve has to be in a negative territory and turning upward. I indicated that the bullish indicator came in May 2009 when the index rose from -386 to -380. Table below shows the March low (2009) up until now.

Date Index
Mar-09 -374.4
Apr-09 -386.0
May-09 -380.5
Jun-09 -376.5
Jul-09 -357.8
Aug-09 -319.1
Sep-09 -265.3
Oct-09 -212.7
Nov-09 -147.3
Dec-09 -61.7
Jan-10 25.1
Feb-10 95.0
Mar-10 168.0

The chart below shows that we are clearly in the positive territory. This leave us with one thing, for the curve to turn negative and reverse for a possible buy signal.

If this curve isn't an indication to sell, then why am I writing about this? Because I believe that it is a great tool for long-term investors and they should be aware of this unique indicator. When the index turned  upward in May 09', many small investors, myself included, were still bearish on the market and ignored this technical indicator. Emotions and anger about the bailout clouded our judgment. As a result, many missed the chance to buy the market via ETFs or mutual funds. Even though I was bearish, I stated in that article "This could be the beginning of a greatest investment opportunity if you look in the right place. I suggest you begin accumulating shares but with caution!"

The good news is that some time in the future, this curve will turn negative again. We'll be more excited when that happens. The bad news is, we just don't know when this will happen. Until then, do your research on the Coppock Curve to see if this indicator can be of any benefit to your investment strategy. We will keep an updated chart on the curve and update you when an opportune time arrives.

Click here for more explanation on the Coppock Curve and here for the calculation method. - Art

Quote of the day:

"To know values is to know the meaning of the market. And values, when applied to stocks, are determined in the end by the dividend yield." Charles H. Dow.
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Coppock Curve Review

Posted on August 31, 2009 by | Comments Off on Coppock Curve Review
"Too much too soon." Those are the words of E.S.C. Coppock in describing the emotional state of the uninitiated investors response to the ups and downs of the stock market. The purpose of the Coppock Curve is to measure the emotional overreaction to the movement of the stock market.

Mr. Coppock observed that investors tend to ignore the fact that earnings are stable or rising and instead sell off a stock which is thought to be in trouble. Therefore, the monthly averaging of an index like the Dow Jones Industrials allows for better clarification of the what the price action is telling us.

So far the Coppock curve is indicating that, although we may not be at the bottom in the stock market, we are still in a relatively risk free period to invest in stocks. The following is the movement of the index from the lowest point since April 2009:

  • Apr 2009: -388
  • May 2009: -383
  • Jun 2009: -378
  • Jul 2009: -359
  • Aug 2009: -321

With the Coppock Curve indicating that we're at a relatively risk free period for stocks along with the Industrial Production Index moving up and the Dow Theory bull market indication of July 23rd, it appears that we could be on our way to higher levels in the stock market and the economy over an extended period of time. Dow Theory still has a pending non-confirmation to be worked through but I will not report on that until we get a resolute signal. Touc.

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Coppock Curve Review

Posted on July 31, 2009 by | 1 comment
Today is the end of the month which means that we can now review the Coppock Curve(also known as the Coppock Index) to determine if the direction for stocks is indicated to be moving higher overall. Since the last bottom in the Coppock Curve back in April the index has had the following monthly figures:

  • April 2009:-388
  • May 2009:-383
  • June 2009:-378
  • July 2009: -359

From what I can tell we need another 3 months of rising numbers along with an increase above -260 for the Coppock Curve to establish a clear signal that a sustainable market reversal is at hand. I know that asking for 3 more months of rising figures seems like a lot. However, I just don't want to get faked out like what occurred in May of 2002. The actual turn in the index took place in March of 2003, almost a full year later. Would I be missing a lot of market "action" by taking this stance? Absolutely. However, the risk to your hard earned principal is what is at stake. It is always best to take the cautious stance on these matters.


Remember, The Coppock Curve is a relative strength index. In almost every instance that this index rises from a negative number to a positive number it has coincided with a relatively risk-free time to invest in stocks. In turn, an improvement in the stock market is a reflection of the better times in the U.S. economy overall. Let us hope that the trend continues. Touc.


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