Since I'm moving back into the old hut at least until the end of the world occurs (December 21st, 2012), I've blown the dust off of the old Coppock Curve data and have posted the chart, updated through June of this year.
As a refresher, the Coppock Curve was developed by a guy named Coppock. He had been asked by the Episcopal Church to identify buying opportunities for long-term investors. He thought market downturns were like bereavements and required a period of mourning so he used 11 and 14 months in his calculation after the church bishops informed him that bereavement periods generally last 11 to 14 months. Gotta love the science.
The formula is simple: Coppock = WMA[10] of (ROC[14] + ROC[11]). WMA is the weighted moving average and ROC is the rate of change. If my weighted averages are weighted in the right places, the chart now looks something like this:
A buy signal is generated when the indicator is below zero and turns upward from a trough. The last time that happened was in early 2009. That's it...end of story. If you are looking for a sell signal using the Coppock Curve you'll have similar success flipping a coin. There is only 50% accuracy for sell signals versus 80% accuracy using buy signals.
Why doesn't this work both ways? That's easy (said the monkey). Look back at the history. Coppock is using bereavement period science here. How many times have you heard someone say, "I am so happy he died. I wonder when I'll be sad again".
I'm assuming that we are talking about loved ones rather than enemies.
