Crazy times for Coppock

As it happens, new buy signals on flip-flopping European markets, look well timed, given that rather than collapsing - as many had predicted - western markets have mostly rallied since the Trump victory, particularly in the US where indices touched record highs; Coppock signals flipped to buy earlier this year.

Fixed income, on the other hand, has suffered, with yields on US Treasuries spiking in the aftermath of the election. As a result many are suggesting the unusually tight correlations between bonds and equities will now revert to a more normal relationship, and that bonds' long bull run might finally be over.

Yet Coppock has recently called the end of the bond bull market once before, in mid-2015, only to reverse those signals a year later when it became clear that bonds were still in demand as a safe haven for investors as global growth fears mounted in the first half of 2016. The same is true of gold, another safe haven asset, which flipped to buy in January and has risen steadily ever since. That run was also unexpectedly brought to an end by the post-election risk-on rally.

But unnerving though the very recent moves in safe-haven assets have been, it is again probably too early to say whether the bubble has now burst for good - there is simply no clarity on whether Trump's policies will be inflationary and whether the US interest rate cycle will turn upwards. Such a move would similarly hit emerging markets - which have also been weak since Trump's victory, but largely remain in Coppock buy territory.

For now, then, Coppock devotees would do well to stick to the mechanical nature of the system than attempt to interpret the increasingly difficult-to-decipher relationship between markets and protectionist geopolitics.

October's Coppock signals