Coppock Curve
Momentum
Edwin Coppock designed this curve in 1962 at the request of a church congregation that wanted to know when it was safe to invest. He asked himself how long people grieve, was told 11 to 14 months, and built his indicator on that. It is a pure bottom indicator.
Construction & calculation
- Compute the ROC over 11 months and the ROC over 14 months (in the scanner: 10 and 8 months, converted to trading days).
- Add both up.
- Smooth the sum with a weighted moving average over 10 months.
Coppock = WMA( ROC(11 months) + ROC(14 months), 10 months )
Interpretation
- The classic signal: the curve is below zero and turns up. Historically that marks the end of a bear market.
- Coppock deliberately has no sell signal. The curve is designed to find long-term entry points, not to exit.
- On a monthly basis this signal has an impressive historical track record on indices.
How the signal works in this scanner
Buy signal (green)The Coppock Curve is below zero and has started rising from its trough within the last 15 bars.
Watch-outs & pitfalls
- Very slow: this is an indicator for investors, not traders. At least 345 trading days of history are required.
- Meant for broad indices. On individual stocks — certainly volatile ones — its signal value is considerably lower.
- By design there is no bearish variant. The row therefore shows only buy signals.