Red continent

Yet it does fly in the face of the idea that the ECB's hints at further loosening of monetary policy will send the continents markets ever higher. Coppock history shows the powerful effects of central bank largesse, not least Mario Draghi's "do whatever it takes" speech in July 2012 which was swiftly followed by a raft of Coppock buys on no fewer than 10 European markets - 13 if we include the three UK major indices we track, and another four if we include those markets that had already given buy signals in anticipation of huge hints at massive intervention. Yet the ECB's latest moves - the stick of negative interest rates and the carrot of full-blown quantitative easing (QE) further down the road - have clearly not had such a pronounced effect. Why are many would-be investors still so wary of investing in its markets.?

Perhaps the market is now less convinced that while the single currency does appear, as Mr Draghi promised, to have been saved, the deflationary threat to continental prosperity is proving a far more intractable problem - and one that will not be resolved with the somewhat non-committal approach to stimulus the ECB appears to be taking, even if Mr Draghi has promised that "we aren't finished here". Or perhaps, after years of QE elsewhere having already dragged many European markets up through multi-year highs, investors are betting that monetary drugs can't lift asset prices much further - although that doesn't yet seem to have dampened the spirits of the gilt market; Coppock suggests investors should still be long of all major government paper.

Nevertheless, history tells us that we should be somewhat wary of Coppock sell signals - especially as the flurry of sells follows a flurry of buys - or, more accurately, cancelled sell signals (what we once called an 'unofficial buy') - in May. Within the past year alone, the Dax has given three sell signals, all of which have been cancelled shortly after, in two cases in the following month. While this may suggest volatility, none of these swinging signals have accompanied any major market moves - instead they are simply the result of the stuttering two steps forward, two steps back market that has characterised 2014 so far. Should the ECB finally let the donkey eat its carrot, those sell signals could still end up looking rather ill-timed.

Such hesitancy does not, however, appear to have afflicted Coppock when it comes to those markets where QE has run its course and is now being scaled back: the FTSE - where Coppock sell signals around the new year have yet to be reversed - or on the other side of the Atlantic, where the S&P 500, DJ Industrial and Nasdaq Composites all remain as sell. Conversely, last year's emerging markets troublespots remain on the up - Coppock gave a new buy signals on the Bangkok SET, a market that has staged a strong recovery after plunging last December, while the May buy signal on Russia's Micex still holds strong - brave investors who saw past the events in the Ukraine and bought the index then will already have enjoyed a 5 per cent gain, and the market remains cheap on a PE ratio of less than seven.

And therein lies a valuable Coppock lesson: that it is at its most useful when spotting the start of upswings in very depressed markets.

COPPOCK SIGNALS