The IC Coppock indicators gave no buy signals in January, unsurprising given the chaos that gripped markets around the world as 2014 got under way. Six major markets did give sell signals, though, along with a handful of sectors and emerging markets. Chief among these negative indicators was a sell on Japan's broad-based Topix index, which by last week had fallen 13 per cent from its 8 January high of 1306 as the yen suddenly found itself a safe haven for investors seeking refuge from the sell-off in emerging markets currencies. A weak yen is an important component of Abenomics, making Japanese exports more competitive - the currency fell 18 per cent last year relative to the US dollar but appreciated more than 4 per cent in January and early-February.
Could this be the start of a sustained rout for Japanese equities? Opinions are mixed. Many believe that, regardless of the yen's progress, Japanese shares are cheap on a widely followed price-to-book value measure, and the majority of Japanese companies are delivering earnings growth ahead. Nearly two-thirds of those that have reported this year have beaten analysts' earnings forecasts. Others argue that it's still early days for Abenomics, and that it will be some time before it will be possible to tell whether Japan's economic experiment has created a sustainable recovery. There are also concerns that a proposed sales tax increase from 5 to 8 per cent in April this year, and potentially again to 10 per cent in 2015, could create a headwind to further earnings growth.
As ever, we'd advise caution when interpreting our Coppock sell signals - but it may help you make up your mind if you think the Japanese market's stellar 2013 will be a tough performance to follow.
Topix/yen chart
MAJOR INDICES
Index/market | Average Index Jan-14* | Jan | Dec | Nov | Signal† | Month of last buy signal | Monthly average index then | Index peak since last buy signal | Month of last sell signal | Monthly average index then | |
---|---|---|---|---|---|---|---|---|---|---|---|
UK Govt. Secs | 160.79 | -31.8 | -31.2 | -28.5 | WAIT | Aug 11* | 163.26 | 177.08 | (24/07/12) | 12/12 | 175.55 |
FT 30 | 2,780.67 | +160.3 | +168.9 | +173.5 | WAIT | Jul 12 | 1,952.99 | 2,851.40 | (15/01/14) | 12/13 | 2,718.83 |
FTSE 100 | 6,714.86 | +70.6 | +75.4 | +77.5 | WAIT | Jul 12 | 5,636.46 | 6,840.27 | (22/05/13) | 12/13 | 6,586.89 |
FTSE All-Share | 3,598.07 | +83.4 | +87.9 | +89.7 | WAIT | Aug 12 | 3,010.36 | 3,660.84 | (20/01/14) | 12/13 | 3,521.71 |
FT Gold Mines | 1,414.08 | -265.7 | -260.6 | -248.1 | WAIT | Oct 12 | 3,213.21 | 3,330.73 | (01/10/12) | 12/12 | 2,982.77 |
Amsterdam | 607.37 | +67.4 | +66.7 | +65.9 | HOLD | Oct 13* | 579.74 | 618.07 | (22/01/14) | 07/13 | 552.16 |
ASX All Ord | 5,289.60 | +88.2 | +94.7 | +98.3 | WAIT | Jul 12 | 4,181.70 | 5,437.30 | (28/10/13) | 12/13 | 5,222.90 |
S&P/ASX 200 Energy | 13,381.04 | +43.7 | +44.0 | +39.6 | SELL | May 13 | 13,183.19 | 14,371.48 | (27/09/13) | 01/14 | 13,381.04 |
Belgium S.E. | 10,584.41 | +93.1 | +90.3 | +88.2 | HOLD | Oct 13* | 10,300.31 | 10,791.10 | (20/01/14) | 06/13 | 9,017.25 |
Dax (Germany) | 9,516.78 | +125.4 | +124.5 | +122.9 | HOLD | Nov 13* | 9,170.55 | 9,742.96 | (17/01/14) | 08/13 | 8,332.46 |
Dow Jones | 16,243.72 | +103.2 | +101.0 | +94.2 | HOLD | Mar 13* | 14,418.26 | 16,576.66 | (31/12/13) | 01/13 | 13,615.32 |
Rep of Ireland (ISEQ) | 4,732.00 | +177.7 | +171.3 | +165.8 | HOLD | Mar 13* | 3,883.38 | 4,853.61 | (22/01/14) | 02/13 | 3,641.55 |
France CAC 40 | 4,248.40 | +104.8 | +110.5 | +114.3 | WAIT | Jul 12 | 3,199.55 | 4,332.07 | (15/01/14) | 12/13 | 4,172.21 |
Hang Seng | 22,725.16 | +37.3 | +50.1 | +55.9 | WAIT | Sep 13 | 22,903.98 | 24,038.55 | (02/12/13) | 10/13 | 23,096.68 |
Italy BCI | 1,070.28 | +102.9 | +104.0 | +100.2 | SELL | Aug 12 | 1,129.42 | 1,150.23 | (29/04/11) | 01/14 | 1,070.28 |
S. Africa Gold | 1,153.93 | -261.4 | -255.4 | -241.7 | WAIT | Jun 12 | 2,524.83 | 2,668.53 | (06/06/12) | 12/12 | 2,295.53 |
S. Africa Industrial | 43,695.96 | +109.4 | +118.1 | +122.9 | WAIT | Oct 13* | 43,473.10 | 44,940.44 | (02/01/14) | 11/13 | 43,386.55 |
Straits Times | 3,115.88 | +19.3 | +30.5 | +40.1 | WAIT | Jul 12 | 2,987.49 | 3,454.37 | (22/05/13) | 07/13 | 3,209.06 |
Tokyo New S.E. | 1,275.17 | +299.7 | +309.9 | +303.2 | SELL | Aug 12 | 748.73 | 1,306.23 | (08/01/14) | 01/14 | 1,275.17 |
Toronto Comp | 13,728.07 | +40.3 | +38.0 | +34.6 | HOLD | Aug 12 | 11,921.00 | 13,990.29 | (20/01/14) | 11/11 | 12,383.20 |
Toronto Gold | 1,539.06 | -225.7 | -227.1 | -218.1 | SELL†† | Oct 12 | 2,842.54 | 2,952.41 | (05/10/12) | 01/14* | 1,539.06 |
Sweden OMX | 1,329.04 | +99.2 | +99.9 | +98.8 | SELL | Jun 12 | 982.67 | 1,355.24 | (22/01/14) | 01/14 | 1,044.48 |
FTSE techMARK 100 | 3,213.16 | +133.9 | +133.8 | +132.1 | HOLD | July 12* | 2,283.04 | 3,258.82 | (20/01/14) | 11/11 | 1,934.67 |
Nasdaq 100 | 3,557.89 | +126.0 | +112.2 | +93.7 | HOLD | May 13* | 2,981.19 | 3,627.72 | (22/01/14) | 01/13 | 2,736.90 |
*Average index for January 2014. †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 Indicator | Index* | Jan | Dec | Nov | Sign.† |
---|---|---|---|---|---|
Argentina | 17,386.11 | +428.2 | +437.2 | +417.6 | SELL |
FTSE Aim | 870.42 | +72.7 | +60.2 | +44.1 | HOLD |
Brazil | 49,139.75 | -68.5 | -59.3 | -55.1 | WAIT |
China | 2,224.04 | -3.9 | +10.1 | +8.7 | SELL |
Greece | 1,225.02 | +214.7 | +233.2 | +240.8 | WAIT |
India | 6,216.29 | +36.0 | +43.1 | +47.5 | WAIT |
Indonesia | 4,353.65 | +26.8 | +39.6 | +54.7 | WAIT |
Israel | 1,218.90 | +61.8 | +57.5 | +54.0 | HOLD |
Mexico | 11,209.84 | -66.8 | -49.8 | -34.8 | WAIT |
Philippines | 6,009.95 | +78.7 | +103.7 | +127.7 | WAIT |
Poland | 50,820.34 | +82.9 | +92.1 | +97.0 | WAIT |
Portugal | 6,922.12 | +93.9 | +98.4 | +98.5 | WAIT |
Russia | 16,073.06 | -22.3 | -22.4 | -27.2 | HOLD |
South Korea | 1,948.22 | +8.8 | +12.3 | +12.7 | WAIT |
Spain | 1,035.96 | +115.3 | +114.7 | +109.9 | HOLD |
Switzerland | 8,323.67 | +117.7 | +127.7 | +136.4 | WAIT |
Thailand | 1,274.55 | +42.1 | +72.1 | +95.9 | WAIT |
Turkey | 66,002.06 | +25.9 | +66.2 | +98.1 | WAIT |
*Average index for January 2014. †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 Indicator | Index* | Jan | Dec | Nov | Sign.† |
---|---|---|---|---|---|
Mining | 15,542.98 | -69.8 | -61.4 | -55.1 | WAIT |
Oil & Gas | 8,223.40 | +1.1 | -2.1 | -9.1 | HOLD |
Chemicals | 11,620.28 | +90.4 | +85.7 | +85.5 | HOLD |
Constr & Bldg mats | 4,649.36 | +137.3 | +130.4 | +121.7 | HOLD |
Forestry & paper | 11,589.52 | +319.7 | +214.1 | +213.5 | HOLD |
Steel & other metals | 1,351.60 | -285.0 | -274.8 | -268.6 | WAIT |
Aerospace & defence | 5,518.10 | +185.9 | +189.2 | +189.2 | WAIT |
Diversified industrls | 3,679.35 | +154.2 | +154.0 | +151.9 | HOLD |
Electronic & electr eqpt | 5,709.48 | +142.5 | +142.3 | +139.3 | HOLD |
Eng'g & machinery | 10,617.09 | +169.0 | +178.5 | +184.0 | WAIT |
Automobiles & parts | 9,177.14 | +342.7 | +336.1 | +325.3 | HOLD |
H'hold goods textiles | 5,279.57 | +626.1 | +670.6 | +679.1 | WAIT |
Beverages | 14,193.09 | +74.4 | +90.3 | +105.9 | WAIT |
Food producers | 7,358.91 | +91.1 | +104.9 | +119.8 | WAIT |
Health | 5,040.78 | +116.3 | +112.3 | +106.9 | HOLD |
Personal care | 21,209.20 | +132.4 | +134.9 | +130.4 | SELL |
Pharmaceuticals | 11,868.11 | +99.2 | +92.8 | +85.2 | HOLD |
Tobacco | 34,784.59 | +1.6 | +9.1 | +14.7 | WAIT |
General retailers | 2,734.51 | +232.3 | +232.3 | +235.4 | WAIT |
Leisure & hotels | 7,250.93 | +203.2 | +206.1 | +209.4 | WAIT |
Media ent't | 6,490.84 | +179.7 | +183.3 | +182.2 | SELL |
Support services | 6,433.34 | +130.9 | +133.2 | +135.4 | WAIT |
Transport | 4,837.74 | +254.4 | +244.4 | +228.5 | HOLD |
Food & drug rtlrs | 4,453.00 | +62.8 | +74.2 | +82.4 | WAIT |
Telecommns svs | 4,504.18 | +289.7 | +283.0 | +271.6 | HOLD |
Electricity | 8,990.80 | -4.7 | -4.1 | -1.8 | WAIT |
Other utilities | 7,343.48 | +46.5 | +53.5 | +61.7 | WAIT |
Banks | 4,817.83 | +108.0 | +134.3 | +156.1 | WAIT |
Insurance | 2,111.74 | +75.1 | +82.2 | +91.1 | WAIT |
Life assurance | 7,056.54 | +198.5 | +205.9 | +212.8 | WAIT |
Investment cos | 7,158.86 | +93.3 | +100.0 | +102.2 | WAIT |
Other finance | 6,628.22 | +215.7 | +224.2 | +222.6 | SELL |
IT hardware | 1,490.83 | +187.3 | +216.5 | +234.7 | WAIT |
Software & comp svs | 1,319.48 | +142.1 | +148.0 | +154.1 | WAIT |
*Average index for January 2014. †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.