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Coppock lacks stimulus

For all of the action on the markets, it has proved a relatively quiet month on Coppock - and a month's haitus in our Coppock coverage has usefully meant we have not been suckered by a flurry of European buy signals, all of which were reversed in short order.

European markets were, like those in London, hit by the UK's shock vote to leave the European Union at the end of June. And, like the UK market, they experienced a strong summer bounceback that continued throughout July and August, helped along by the prospect of more European Central Bank (ECB) stimulus and the delivery of actual stimulus in the UK - an interest rate cut and a £70bn bond-buying programme announced at the start of August.

 

Bonds versus equities

 

But, with markets seemingly addicted to such stimulus, the ECB's failure to deliver at its September meeting prompted a sharp sell-off that European markets have yet to recover from, hindered by the banking crisis sweeping the continent. As a retrospective system, Coppock's buy signals would have come just as markets soured.

September has proved a better month for UK and US markets, which remain firmly in Coppock buy territory, as do bonds and commodities. But, as Kate Beioley notes on page 47, there are wider signs that the previously insatiable demand for the sanctuary of government debt may be waning, with a September sell-off pointing to a growing belief that the effectiveness of monetary stimulus may have run its course, and that structural reforms are required instead. We would not be surprised to see this reflected in the Coppock indicators in short order.

 

Latest Coppock readings

North America JunJulAugSepLatest signalLatest signal (date)
S&P 500 Composite-1.71.014.295.32BUYMay-16
Dow Jones Industrial Average-2.550.513.835BUYMay-16
Nasdaq 1003.845.337.968.48CANCEL SELLJul-16
Nasdaq Composite-1.41-0.052.593.63BUYJul-16
S&P/TSX-17.31-13.38-8.49-4.08BUYApr-16
Asia Pacific, Africa
Bangkok SET-18.68-12.47-5.93-1.66BUYApr-16
FTSE Bursa Malaysia KLCI-14.14-11.82-9.06-7.91BUYFeb-16
FTSE China B35-22.41-27.29-29.74-29.97SELLJul-15
Hang Seng-35.65-33.45-28.35-23.52BUYJul-16
Korea SE Composite-5.52-4.91-3.92-3.02BUYJul-16
Indonesia Jakarta Composite-15.89-9.3340.2347.718BUYMar-16
Singapore Straits Times-33.91-31.09-27.94-25.05BUYJun-16
Taiwan SE Weighted-19.6-15.54-10.88-5.79BUYMay-16
Japan Topix-17.93-23.4-26.01-29.62SELLAug-15
Australia ASX 200-17.2-13.7-9.7-7.6BUYJul-16
New ZealandNZ 5020.0225.0730.8332.77CANCEL SELLMar-16
South Africa JSE TOP 400.10.320.56-1.12CANCEL BUY*Sep-16
India Sensex-15.78-11.68-7.14-4.3BUYMay-16
South America
Mexico IPC (Bolsa)4.225.98.319.41CANCEL SELLMar-16
Brazil Bovespa-16.5-6.593.1812.32BUYMar-16
MSCI EM Latin America US%-43.39-31.227-18.973-8.594BUYJan-16
Europe/UK
Netherlands AEX-10.53-11.3-9.66-10.42CANCEL BUY*Sep-16
Greece Athex Composite-58.7-54.72-51.36-50.16BUYJul-16
ATX Austrian Traded-12.54-14.64-13.42-12.76SELLJan-16
Belgium Bel 20-5.22-6.88-5.96-6.98CANCEL BUY*Sep-16
Germany Dax 30-14.77-15.39-12.99-13.31CANCEL BUY*Sep-16
Euro Stoxx 50-23.16-25.104-24.69-26.434CANCEL BUY*Sep-16
France Cac 40-12.99-15.18-15.4-17.6SELLDec-15
FTSE 100-15.19-11.75-6.51-2.58BUYMay-16
FTSE 250-0.91-2.43-1.56-0.9SELLJan-16
FTSE All Share-12.53-9.96-5.52-2.16BUYJun-16
FTSE MIB-29.65-36.22-40.47-45.72SELLDec-15
Ibex 35-37.32-39.06-38.28-38.73CANCEL BUY*Sep-16
Ireland SE General (ISEQ)27.5519.2215.29.57SELLJan-16
OMX Stockholm 30-24.79-26.11-24.15-23.13SELLJun-15
Oslo Exchange All share-4.6-3.45-1.37-0.24BUYJul-16
Portugal PSI 20-22.84-24.98-25.73-28.63CANCEL BUYFeb-16
Russia MICEX Index30.5630.832.0932.35CANCEL SELLJul-16
Swiss Market Index-17.88-19.18-18.41-19.68CANCEL BUY*Sep-16
Fixed income
Barclays US Aggregate Bond0.841.9452.7643.335BUYApr-16
US 10y Treasury4.476.157.3838.262CANCEL SELLApr-16
UK 10y Treasury7.2310.34713.93216.712CANCEL SELLMay-16
Japan 10y Treasury9.4510.27810.54510.664CANCEL SELLJan-16
Germany 10y Treasury6.688.64610.40211.783CANCEL SELLMay-16
FT All Govt4.397.54411.40713.859CANCEL SELLMay-16
IBOXX Liquid £ Corp Long-dated-5.69-0.5666.5711.428BUYMay-16
FTSE British Govt index linked all mats7.2810.5318.1424.32CANCEL SELLJun-16
Commodities (S&P Goldman Sachs Total Return indices)
Agriculture-15.71-12.68-14.9-13.66BUY*Sep-16
Industrial Metals-38.21-32.37-27.35-19.58BUYFeb-16
Livestock-29.89-31.65-31.81-35.7CANCEL BUYJul-16
Precious Metals3.3310.615.8621.44BUYJan-16
Gold Bullion4.9311.4516.4221.92BUYJan-16
Crude Oil-87.15-86.41-83.51-77.06BUYFeb-16
*New signals

visible-status-Public story-url-Coppock Indicators 14 October 2016.xml

By John Hughman,
13 October 2016

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