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No turning point

Coppock flashes a seasonal shade of red in December, as sell signals abound - but it looks like a temporary blip
January 9, 2014

After a quiet November for Coppock all hell broke loose in December, with no fewer than five sell signals across the major markets we cover, including the FTSE 100 and All-share, and a flurry of sells at a FTSE sector level - notably the general retail and household goods & home construction sectors, both of which were notable beneficiaries of the UK's housing-led recovery in 2013

Whether this marks a genuine turning point in the markets is by no means clear, however. As we explained last month, Coppock sell signals have often had a habit of reversing rather quickly - support, maybe, for the purists' view that the Coppock system should be heeded when identifying only buying opportunities.

And while the average level of the FTSE 100, for example, fell in December to trigger the warning, the month really was, to purloin a footballing cliche, a game of two halves. The UK and other major markets softened in the first two weeks, only to roar back into life in the second as Santa delivered his traditional festive rally to approach five year highs. In short, the average index level upon which Coppock is calculated didn't necessarily reflect the market's progress.

What's more, the consensus among market commentators is that the good times will continue to roll in 2014 for developed markets, if not for emerging market investors; those indices recorded more sells in December, as Fed tapering talk became a reality. And digging into the FTSE sectors again, it seems any nervousness that government attempts to cool the housing market were forgotten come Christmas - as the graph shows, household goods also enjoyed the late December uplift, although retail continued to look rather soggy as fears of a Christmas trading washout mounted.

MAJOR INDICES

Index/marketAverage Index Dec-13*DecNovOctSignal†Month of last buy signalMonthly average index then

Index peak since last buy signal

Month of last sell signalMonthly average index then
UK Govt. Secs              160.17 -31.2-28.5-25.7WAITAug 11††163.26177.08(24/07/12)12/12175.55
FT 30            2,718.83 +168.9+173.5+169.1SELLJul 121,952.992,820.70(31/10/13)12/13         2,718.83
FTSE 100           6,586.89 +75.4+77.5+74.5SELLJul 125,636.466,840.27(22/05/13)12/13         6,586.89
FTSE All-Share           3,521.71 +87.9+89.7+86.5SELLAug 123,010.363,609.71(30/10/13)12/13         3,521.71
FT Gold Mines           1,299.27 -260.6-248.1-234.7WAITOct 123,213.213,330.73(01/10/12)12/122,982.77
Amsterdam              589.73 +66.7+65.9+60.1HOLDOct 13††579.74607.98(31/12/13)07/13552.16
ASX All Ord           5,222.90 +94.7+98.3+94.2SELLJul 124,181.705,437.30(28/10/13)12/13         5,222.90
S&P/ASX 200 Energy        13,277.50 +44.0+39.6+28.2HOLDMay 1313,183.1914,371.48(27/09/13)04/1312,770.42
Belgium S.E.        10,343.23 +90.3+88.2+82.2HOLDOct 13††10,300.3110,673.80(31/12/13)06/139,017.25
Dax (Germany)           9,289.31 +124.5+122.9+116.8HOLDNov 13††9,170.559,589.39(27/12/13)08/138,332.46
Dow Jones        16,106.75 +101.0+94.2+85.3HOLDMar 13††14,418.2616,576.66(31/12/13)01/1313,615.32
Rep of Ireland (ISEQ)           4,436.89 +171.3+165.8+155.1HOLDMar 13††3,883.384,548.90(27/12/13)02/133,641.55
France CAC 40           4,172.21 +110.5+114.3+108.5SELLJul 123,199.554,320.68(18/11/13)12/13         4,172.21
Hang Seng        23,376.33 +50.1+55.9+59.7WAITSep 1322,903.9824,038.55(02/12/13)10/1323,096.68
Italy BCI           1,012.43 +104.0+100.2+88.3HOLDAug 121,129.421,150.23(29/04/11)11/11996.82
S. Africa Gold           1,040.81 -255.4-241.7-232.4WAITJun 122,524.832,668.53(06/06/12)12/122,295.53
S. Africa Industrial        43,284.80 +118.1+122.9+123.8WAITOct 13††43,473.1044,580.20(30/12/13)11/1343,386.55
Straits Times           3,115.51 +30.5+40.1+43.7WAITJul 122,987.493,454.37(22/05/13)07/133,209.06
Tokyo New S.E.           1,257.03 +309.9+303.2+285.2HOLDAug 12748.731,302.29(30/12/13)12/12746.00
Toronto Comp        13,357.17 +38.0+34.6+29.0HOLDAug 1211,921.0013,621.55(31/12/13)11/1112,383.20
Toronto Gold           1,353.19 -227.1-218.1-205.9WAITOct 122,842.542,952.41(05/10/12)12/122,697.49
Sweden OMX           1,293.47 +99.9+98.8+92.2HOLDJun 12982.671,334.42(27/12/13)12/121,044.48
FTSE techMARK 100           3,095.41 +133.8+132.1+129.9HOLDJuly 12††2,283.043,205.21(03/12/13)11/111,934.67
Nasdaq 100           3,515.20 +112.2+93.7+75.8HOLDMay 13††2,981.193,592.00(13/12/13)01/132,736.90

*Average index for November 2013. †IC/Coppock indicator. ††Unofficial signal. BUY/SELL = self explanatory; WAIT = you sold at the last sell signal and are now waiting for the next buy signal; HOLD = you bought at the last buy signal and are now awaiting the next sell signal.

EMERGING MARKETS

IC/Coppock IndicatorIndex*DecNovOctSign.†
Argentina       16,630.07 +437.2+417.6+352.3HOLD
FTSE Aim             828.40 +60.2+44.1+28.3HOLD
Brazil       50,945.47 -59.3-55.1-57.1SELL††
China          2,373.83 +10.1+8.7+1.7HOLD
Greece          1,165.31 +233.2+240.8+241.1WAIT
India          6,249.62 +43.1+47.5+51.9WAIT
Indonesia          4,223.76 +39.6+54.7+68.4WAIT
Israel          1,207.81 +57.5+54.0+50.7HOLD
Mexico       11,454.55 -49.8-34.8-17.7WAIT
Philippines          5,941.32 +103.7+127.7+142.3WAIT
Poland       52,023.31 +92.1+97.0+90.0SELL
Portugal          6,485.25 +98.4+98.5+94.0SELL
Russia       15,979.05 -22.4-27.2-37.0HOLD
South Korea          1,992.37 +12.3+12.7+8.4SELL
Spain             979.16 +114.7+109.9+96.7HOLD
Switzerland          8,050.70 +127.7+136.4+138.1WAIT
Thailand          1,345.25 +72.1+95.9+113.0WAIT
Turkey       71,086.38 +66.2+98.1+122.9WAIT
Venezuela  2,653,390.00 +2290.5+2143.3+1918.4HOLD

*Average index for November 2013. †IC/Coppock indicator. ††Unofficial signal. BUY/SELL = self explanatory; WAIT = you sold at the last sell signal and are now waiting for the next buy signal; HOLD = you bought at the last buy signal and are now awaiting the next sell signal.

FTSE SECTORS

For a list of the constituents of the FTSE All-Share sector indices click here

IC/Coppock IndicatorIndex*DecNovOctSign.†
Mining  15,347.57 -61.4-55.1-57.2SELL††
Oil & Gas    8,039.80 -2.1-9.1-16.8HOLD
Chemicals  11,203.75 +85.7+85.5+86.5BUY††
Constr & Bldg mats    4,320.82 +130.4+121.7+101.5HOLD
Forestry & paper  11,453.05 +214.1+213.5+357.3BUY††
Steel & other metals    1,365.22 -274.8-268.6-267.0WAIT
Aerospace & defence    5,405.73 +189.2+189.2+182.0SELL
Diversified industrls    3,558.47 +154.0+151.9+145.1HOLD
Electronic & electr eqpt    5,543.74 +142.3+139.3+134.2HOLD
Eng'g & machinery  10,313.14 +178.5+184.0+177.8SELL
Automobiles & parts    8,616.09 +336.1+325.3+295.9HOLD
H'hold goods textiles    5,651.85 +670.6+679.1+639.4SELL
Beverages  14,250.11 +90.3+105.9+117.5WAIT
Food producers    7,173.94 +104.9+119.8+130.8WAIT
Health    4,844.93 +112.3+106.9+102.3HOLD
Personal care  20,977.29 +134.9+130.4+120.8HOLD
Pharmaceuticals  11,422.48 +92.8+85.2+73.4HOLD
Tobacco  35,850.02 +9.1+14.7+15.8WAIT
General retailers    2,621.17 +232.3+235.4+230.4SELL
Leisure & hotels    6,895.44 +206.1+209.4+211.0WAIT
Media ent't    6,372.86 +183.3+182.2+172.6HOLD
Support services    6,217.39 +133.2+135.4+135.7WAIT
Transport    4,775.28 +244.4+228.5+204.4HOLD
Food & drug rtlrs    4,524.75 +74.2+82.4+79.1SELL
Telecommns svs    4,384.34 +283.0+271.6+249.9HOLD
Electricity    8,957.72 -4.1-1.8-0.2WAIT
Other utilities    7,296.04 +53.5+61.7+65.7WAIT
Banks    4,701.79 +134.3+156.1+171.1WAIT
Insurance    2,048.62 +82.2+91.1+94.6WAIT
Life assurance    6,768.88 +205.9+212.8+212.5SELL
Investment cos    7,071.82 +100.0+102.2+100.1SELL
Other finance    6,463.43 +224.2+222.6+217.9HOLD
IT hardware    1,509.66 +216.5+234.7+258.1WAIT
Software & comp svs    1,265.61 +148.0+154.1+157.5WAIT

*Average index for November 2013. †IC/Coppock indicator. ††Unofficial signal. BUY/SELL = self explanatory; WAIT = you sold at the last sell signal and are now waiting for the next buy signal; HOLD = you bought at the last buy signal and are now awaiting the next sell signal.