Coppock Curve November 2011 Update

Fool me once, shame on - shame on you. Fool me - you can't get fooled again.
~George W. Bush


Although the Cheetum Market Indicator (CMI) does not use either of these signals to determine market direction, the long term "convincers" of a major market move are the Coppock Curve and the Cheetum Curve.

This recent update to the Coppock Curve shows a continuing downward trend although changes in direction for this curve are far more useful when they swing up from the bottom.



The Cheetum Curve (not related to the CMI) is beginning to tell a scary story of a market that may be on the decline in a big way contrary to recent market action. The red line has crossed below the lower blue horizontal line. You can see what happened last time it crossed this line back in late 2007, early 2008.



A refresher on using this signal is outlined below.

1. A cross of the red ROC line over the black moving average line from below when both lines are below the lower blue horizontal line triggers a 'buy' signal.

Solid confirmation occurs when both the red and black lines cross through the zero line and then continue above the upper blue line. A reversal of the red line prior to crossing through the 'zone' would trigger a sell signal as noted by the yellow arrow.

2. A cross of the red line below the bottom horizontal blue line triggers a 'sell' signal. The black moving average line is not used as an indication of a sell.

3. If the lines are in the 'zero' zone (between the blue horizontal lines, continue with the previous trend. In other words, if they are in the zone, leave 'em alone.