Once again news coming out from Greece has influenced the performance of the world bourses during May. The fact that Greece was unable to form a new government caused a pandemic of malaise to spread across all the stock markets bar China whose index managed to increase this month. Spanish bank debt became problematical as rumours of a bail out spread and put further worries on the Euro. As a result of this there were a number of new IC/Coppock sell signals given in May to add to those already on a wait.
The indices for the FTSE All-Share sectors for chemicals, tobacco, general retailers, transport and software and computer services all succumbed and turned down in May. Their indicators fell in line with the majority of the sectors by producing sell signals. This now only leaves the sectors for aerospace and defence, beverages, leisure & hotels, other utilities and banks on hold.
Other markets that produced sell signals in May were the ones for Singapore and Japan along with the US Nasdaq 100 index. Newcomer, Facebook, experienced a torrid time as new stockholders watched the price of the stock plummet on the Nasdaq stock market. For more information on Nasdaq see The Trader's Comments.
There were, however, a couple of rogue buy signals given - they were the ones covering the stock markets of Belgium and India. These two markets are whipsawing and as such should be treated with great care because they could just as easily turn down again this month.
Summary table of IC/Coppock indicators - major markets worldwide:
For a list of the constituents of the FTSE All-Share sector indices click here
Summary table of IC/Coppock indicators – FTSE All-Share Sectors:
Summary table of IC/Coppock indicators – Emerging & other markets worldwide
ABOUT THE IC/COPPOCK INDICATOR
The IC/Coppock indicator identifies long-term buying opportunities. It is based on a mechanical system known as the 'long-term buying guide', which was devised by Edwin Coppock of Texas. This buying guide was then revised by Investors Chronicle in 1963 - so it differs from the original system.
Mr Coppock only used his indicator as a buying guide, but we also show the sell signals in our table (above), just for interest. However, caution must be exercised when viewing these sell signals because they do not always indicate the start of a bear market. Sell signals do indicate a downward movement in the particular index, but this may well be a mere dip in a continuing bull market.
In the table, you will see the latest indicator, followed by the figures for the previous two months. These indicators can rise and fall, and be positive or negative figures. So when an indicator is in its negative phase, and then begins to rise after a falling trend, this is a buy signal [eg, -5.1 (Jan), -28.3 (Dec), -27 (Nov)]. When the indicator is in a positive rising phase, and begins to fall, this is a sell signal [eg, +120.9 (Jan), +132.5 (Dec), +128 (Nov)].
Unofficial buy signals occur when the indicator begins to rise, but is not in the negative phase. These may give investors an extra opportunity to purchase shares. Conversely, unofficial sells are given when the indicator begins to fall while in the negative phase.