The Transformed Coppock Curve

By: Gerald Hoopes | Tue, Jun 1, 2004
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In my July 30, 2003 communication I presented evidence that the deep Monthly DJIA Coppock Curve buy signals of 4/28/78 and 5/30/03 are a true pattern pair, not just a pair by default. Now I would like to present evidence that the two signals do form a pattern pair merely by default; that not only are they unlike other true pattern pairs, they are also unlike each other.

The first chart shows the Monthly DJIA Coppock Curve from 10/31/60 to 5/28/04. The colored markers indicate the 8 deep buy signals which occurred within that time span. All 8 signals bear some resemblance to one another, but it is difficult to ascertain any pairing off. A more incisive way of looking at the signals is warranted.

The second chart shows a transformation of the Coppock Curve's month to month change over a similar time span. The transformation consists of plotting the month to month change's 7 month moving average (further smoothed by two 10 month moving averages) against the difference between the month to month change's 3 month moving average and its 10 month moving average (which difference is also further smoothed by two 10 month moving averages). The colored markers represent the 8 deep buy signals.

This transformed Coppock Curve travels counterclockwise, sometimes swinging widely, sometimes curling tightly, and (if visualized in three dimensions) sometimes spiraling down into a central vortex.

The next four charts show, in pairs of signals, the 31 months ending in each of the 8 buy signals.

The 8/31/70 (dark green) and 1/31/75 (red) signals are both preceded by spirals into the vortex. The 4/28/67 (periwinkle) and 10/31/88 (brown) signals are also preceded by spirals into the vortex, but which later flare out to the left. The 1/31/63 (orange) and 8/31/82 (pink) signals are preceded by flat, ordinary loops which manage to skirt the vortex. The 4/28/78 (coral) and 5/30/03 (bright green) signals behave differently from the others and from each other. The 4/28/78 signal is preceded simply by a very wide, flat loop; while the 5/30/03 signal is preceded by a gentle, rather uncertain descent into the vortex.

Meanwhile, as to what happens AFTER each signal, the following 4 charts show, in pairs of signals, the transformed Coppock Curve for the 31 months starting with each of the same 8 signals, except in the case of 5/30/03, which has only 13 observations.

It remains to be seen if the transformed Coppock Curve will unfold, post-5/30/03, in a pattern noticeably similar to that of post-4/28/78.

In light of the above, not only are the 4/28/78 and 5/30/03 buy signals unlike the other three pairs, they are unlike each other. They do not constitute a true pattern pair. If they form a pair at all, it is only by default. This evidence deserves some respect, in my opinion. So, until further notice, I will treat 4/28/78 and 5/30/03 as a pair, but only by default.

In conclusion, this evidence implies that the weak DJIA recovery which followed the 4/28/78 buy signal should not be expected to follow, ipso facto, the 5/30/03 signal. But evidence which does no more than deny the pairing does not necessarily imply an outcome different from what a true pairing would imply. In other words, there could be some other feature of the 5/30/03 signal, such as its hesitancy, which leads ultimately to an outcome similar to 4/28/78's.

PS: Note that I now use 8/31/82 as a buy signal date, rather than 9/30/82 which I erroneously used heretofore.


Author: Gerald Hoopes

Gerald Hoopes

An explanation of the Coppock Curve can be found at How to Calculate the Coppock Curve. An archive of Geralds comments can be found in the forums at

This analysis is for academic purposes only and must not be construed as investment or trading advice.

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