S&P Monthly Indicator Bearish for the First Time Since Early 2008

By | April 29, 2016

The S&P 500 index, as everyone knows, has been trading in a wide channel consolidation for the last year. During this time the relative strength index and Chaikin money flow have been tracking lower, below their declining 21 period averages. A narrow opening and closing range high wick “doji” candle formed this month, which represents an inability to hold into the upper end of the channel.

Additionally, the Coppock Curve indicator crossed below its center line for the first time since early 2008. This esoteric indicator is described in the “Chart School” section of Stockcharts.com:

The Coppock Curve is a momentum indicator developed by Edwin “Sedge” Coppock, who was an economist by training. Coppock introduced the indicator in Barron’s in October 1965. The goal of this indicator is to identify long-term buying opportunities in the S&P 500 and Dow Industrials. The signal is very simple. Coppock used monthly data to identify buying opportunities when the indicator moved from negative territory to positive territory. Although Coppock did not use it for sell signals, many technical analysts consider a cross from positive to negative territory as a sell signal.

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