Coppock Curve Buy Signals in Phase Space

By: Gerald Hoopes | Mon, Jun 16, 2003
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As shown in my June 6 communication, the 8 deep and very deep Monthly DJIA Coppock Curve buy signals which occurred between 12/1/61 and 5/30/03 comprise 4 pairs with respect to trading day time path patterns generated by plotting the Six by Ten CI-NCI Ratio against the inverted Six by Ten TRIN.

Another way of depicting those 8 time paths is to reconstruct a phase space by dividing the Six by Ten CI-NCI Ratio by 1.0 plus three 17-day moving averages of the 4-day TRIN minus the 11-day TRIN; and (to scale the vertical axis) taking the natural logarithm of the inverted Six by Ten TRIN. The result is a phase space called "Cycloops," whose overall time path consists of many counterclockwise loops from 12/1/61 to 5/30/03.

Highlighting in pairs the identical 8 time spans as in my June 6 communication (while hiding the overall time path) reveals 4 distinct patterns once again.

Cycloops phase space allows these same 8 Coppock Curve buy signal time paths to be portrayed (only one pair at a time to avoid confusion) alongside those of 6 somewhat complementary sell signals, whose time paths (unlike those of Coppock Curve buy signals) are identified via a superimposed geometric visual aid.

For example:

These 6 Cycloops sell signals were all big winners (false positive sell signals having been filtered out by design retrospectively in February 2000).

To better scale the vertical axis, this DJIA chart does not show the 1/28/00 sell signal.

Notice the false negative sell signals at the DJIA tops of 1966, 1969, 1976, and 1983.


 

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 www.longwaves.net.

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

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