Has the bear market in UK government bonds come to an end? That's what Coppock seems to be telling is this month, with the buy signal on UK government securities coming after a long sell off that, on the face of it, was predicted by the IC Coppock indicator in December 2012.
Despite the continued prospect of US tapering, a gilt bounceback actually makes some sense. As I wrote last week, after a strong run for equities many pension funds will now be trying to lock in gains with safe haven assets. That's symptomatic of a wider 'risk off' mentality seen in the wake of political tension in the Ukraine, the troubles in emerging markets, and the battle against deflation in Europe. It also tallies with the Coppock sell signals given across a number of the UK's more cyclical engineering sectors and the buy signals on FTSE Gold Miners this month. Like gilts, gold has staged a recovery of late after last year's savage sell-off, rising from its per ounce low of $1192 in mid-December to stand at $1360 today as the search for safety resumes.
There is one small fly in the ointment, however. Having rebuilt the Coppock indicator, and thoroughly back tested it, our resident chartered financial analyst Dominic Picarda reveals in this week's Coppock-themed cover feature the indicator isn't much use for beating a simple buy and hold strategy when it comes to bonds.
Dominic's number-crunching has, in fact, made us think more deeply about the usefulness of our Coppock indicator in its current form - not least that while it has proved excellent for helping you time market entry it's not been so good at telling you when to exit. So from next month we will be relaunching the Coppock indicators in a way that analysis suggests will lead to better market-timing decisions. Dominic explains how he's tweaked the system in this week's cover feature that begins on page 24
We know, however, that Coppock has many long-standing devotees among you, so before we make the switch please let us know how you use it and whether there are any existing features that you find indispensable. We'll do our best to incorporate them.
MAJOR MARKETS
Index/market | Average Index Feb-14* | Feb | Jan | Dec | 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 | 161.77 | -30.5 | -31.8 | -31.2 | BUY | Feb 14 | 161.77 | 162.50 | (03/02/14) | 12/12 | 175.55 |
FT 30 | 2,752.34 | +145.5 | +160.3 | +168.9 | WAIT | Jul 12 | 1,952.99 | 2,851.40 | (15/01/14) | 12/13 | 2,718.83 |
FTSE 100 | 6,684.34 | +62.7 | +70.6 | +75.4 | WAIT | Jul 12 | 5,636.46 | 6,865.86 | (24/02/14) | 12/13 | 6,586.89 |
FTSE All-Share | 3,589.84 | +75.5 | +83.4 | +87.9 | WAIT | Aug 12 | 3,010.36 | 3,685.07 | (24/02/14) | 12/13 | 3,521.71 |
FT Gold Mines | 1,562.80 | -258.2 | -265.7 | -260.6 | BUY | Feb 14 | 1,562.80 | 1,648.39 | (24/02/14) | 12/12 | 2,982.77 |
Amsterdam | 602.20 | +68.3 | +67.4 | +66.7 | HOLD | Oct 13†† | 579.74 | 618.07 | (22/01/14) | 07/13 | 552.16 |
ASX All Ord | 5,319.60 | +77.8 | +88.2 | +94.7 | WAIT | Jul 12 | 4,181.70 | 5,450.10 | (24/02/14) | 12/13 | 5,222.90 |
S&P/ASX 200 Energy | 13,520.31 | +40.4 | +43.7 | +44.0 | WAIT | May 13 | 13,183.19 | 14,371.48 | (27/09/13) | 01/14 | 13,381.04 |
Belgium S.E. | 10,652.27 | +96.5 | +93.1 | +90.3 | HOLD | Oct 13†† | 10,300.31 | 11,130.18 | (28/02/14) | 06/13 | 9,017.25 |
Dax (Germany) | 9,498.39 | +126.4 | +125.4 | +124.5 | HOLD | Nov 13†† | 9,170.55 | 9,742.96 | (17/01/14) | 08/13 | 8,332.46 |
Dow Jones | 15,945.46 | +99.4 | +103.2 | +101.0 | SELL | Mar 13†† | 14,418.26 | 16,576.66 | (31/12/13) | 02/14 | 15,945.46 |
Rep of Ireland (ISEQ) | 4,951.51 | +183.2 | +177.7 | +171.3 | HOLD | Mar 13†† | 3,883.38 | 5,195.97 | (28/02/14) | 02/13 | 3,641.55 |
France CAC 40 | 4,294.40 | +101.5 | +104.8 | +110.5 | WAIT | Jul 12 | 3,199.55 | 4,419.13 | (24/02/14) | 12/13 | 4,172.21 |
Hang Seng | 22,188.31 | +24.6 | +37.3 | +50.1 | WAIT | Sep 13 | 22,903.98 | 24,038.55 | (02/12/13) | 10/13 | 23,096.68 |
Italy BCI | 1,092.07 | +107.9 | +102.9 | +104.0 | BUY | Feb 14†† | 1,092.07 | 1,117.93 | (26/02/14) | 01/14 | 1,070.28 |
S. Africa Gold | 1,427.84 | -248.6 | -261.4 | -255.4 | SELL | Jun 12 | 2,524.83 | 2,668.53 | (06/06/12) | 02/14†† | 1,427.84 |
S. Africa Industrial | 41,027.28 | +93.6 | +109.4 | +118.1 | WAIT | Oct 13†† | 43,473.10 | 44,940.44 | (02/01/14) | 11/13 | 43,386.55 |
Straits Times | 3,049.96 | +5.8 | +19.3 | +30.5 | WAIT | Jul 12 | 2,987.49 | 3,454.37 | (22/05/13) | 07/13 | 3,209.06 |
Tokyo New S.E. | 1,201.82 | +271.1 | +299.7 | +309.9 | WAIT | Aug 12 | 748.73 | 1,306.23 | (08/01/14) | 01/14 | 1,275.17 |
Toronto Comp | 13,950.98 | +43.3 | +40.3 | +38.0 | HOLD | Aug 12 | 11,921.00 | 14,227.08 | (24/02/14) | 11/11 | 12,383.20 |
Toronto Gold | 1,718.18 | -209.7 | -225.7 | -227.1 | HOLD | Oct 12 | 2,842.54 | 2,952.41 | (05/10/12) | 01/14†† | 1,539.06 |
Sweden OMX | 1,332.80 | +93.9 | +99.2 | +99.9 | WAIT | Jun 12 | 982.67 | 1,373.36 | (26/02/14) | 01/14 | 1,044.48 |
FTSE techMARK 100 | 3,239.55 | +129.1 | +133.9 | +133.8 | SELL | July 12†† | 2,283.04 | 3,312.69 | (24/02/14) | 11/11 | 1,934.67 |
Nasdaq 100 | 3,610.29 | +138.5 | +126.0 | +112.2 | HOLD | May 13†† | 2,981.19 | 3,699.80 | (27/02/14) | 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* | Feb | Jan | Dec | Sign.† |
---|---|---|---|---|---|
Argentina | 18,512.14 | +419.1 | +428.2 | +437.2 | WAIT |
FTSE Aim | 873.97 | +81.0 | +72.7 | +60.2 | HOLD |
Brazil | 47,380.80 | -75.3 | -68.5 | -59.3 | WAIT |
China | 2,247.21 | -19.2 | -3.9 | +10.1 | WAIT |
Greece | 1,256.04 | +194.7 | +214.7 | +233.2 | WAIT |
India | 6,074.75 | +29.8 | +36.0 | +43.1 | WAIT |
Indonesia | 4,515.12 | +15.6 | +26.8 | +39.6 | WAIT |
Israel | 1,220.13 | +64.1 | +61.8 | +57.5 | HOLD |
Mexico | 10,758.31 | -81.6 | -66.8 | -49.8 | WAIT |
Philippines | 6,155.45 | +52.3 | +78.7 | +103.7 | WAIT |
Poland | 52,698.20 | +81.0 | +82.9 | +92.1 | WAIT |
Portugal | 7,062.28 | +91.2 | +93.9 | +98.4 | WAIT |
Russia | 16,054.18 | -21.7 | -22.3 | -22.4 | HOLD |
South Korea | 1,937.73 | +5.2 | +8.8 | +12.3 | WAIT |
Spain | 1,025.59 | +119.2 | +115.3 | +114.7 | HOLD |
Switzerland | 8,355.40 | +105.4 | +117.7 | +127.7 | WAIT |
Thailand | 1,303.49 | +13.5 | +42.1 | +72.1 | WAIT |
Turkey | 63,437.34 | -8.2 | +25.9 | +66.2 | 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* | Feb | Jan | Dec | Sign.† |
---|---|---|---|---|---|
Mining | 16,487.70 | -72.9 | -69.8 | -61.4 | WAIT |
Oil & Gas | 8,032.86 | +1.7 | +1.1 | -2.1 | HOLD |
Chemicals | 11,639.68 | +92.4 | +90.4 | +85.7 | HOLD |
Constr & Bldg mats | 4,762.40 | +138.6 | +137.3 | +130.4 | HOLD |
Forestry & paper | 11,768.92 | +282.6 | +319.7 | +214.1 | SELL |
Steel & other metals | 1,156.64 | -298.5 | -285.0 | -274.8 | WAIT |
Aerospace & defence | 5,146.38 | +168.3 | +185.9 | +189.2 | WAIT |
Diversified industrls | 3,610.14 | +146.8 | +154.2 | +154.0 | SELL |
Electronic & electr eqpt | 5,611.84 | +132.4 | +142.5 | +142.3 | SELL |
Eng'g & machinery | 10,704.70 | +154.7 | +169.0 | +178.5 | WAIT |
Automobiles & parts | 9,543.09 | +342.7 | +342.7 | +336.1 | SELL |
H'hold goods textiles | 5,023.39 | +552.3 | +626.1 | +670.6 | WAIT |
Beverages | 13,435.17 | +49.9 | +74.4 | +90.3 | WAIT |
Food producers | 7,373.40 | +74.2 | +91.1 | +104.9 | WAIT |
Health | 5,322.13 | +126.0 | +116.3 | +112.3 | HOLD |
Personal care | 21,366.72 | +125.3 | +132.4 | +134.9 | WAIT |
Pharmaceuticals | 12,322.40 | +105.8 | +99.2 | +92.8 | HOLD |
Tobacco | 34,829.97 | -7.5 | +1.6 | +9.1 | WAIT |
General retailers | 2,776.25 | +229.9 | +232.3 | +232.3 | WAIT |
Leisure & hotels | 7,270.42 | +192.8 | +203.2 | +206.1 | WAIT |
Media ent't | 6,408.25 | +168.6 | +179.7 | +183.3 | WAIT |
Support services | 6,402.07 | +123.8 | +130.9 | +133.2 | WAIT |
Transport | 4,922.85 | +258.7 | +254.4 | +244.4 | HOLD |
Food & drug rtlrs | 4,437.97 | +48.0 | +62.8 | +74.2 | WAIT |
Telecommns svs | 4,704.27 | +286.1 | +289.7 | +283.0 | SELL |
Electricity | 9,245.37 | -1.8 | -4.7 | -4.1 | BUY |
Other utilities | 7,521.99 | +41.6 | +46.5 | +53.5 | WAIT |
Banks | 4,634.98 | +76.2 | +108.0 | +134.3 | WAIT |
Insurance | 2,123.92 | +66.4 | +75.1 | +82.2 | WAIT |
Life assurance | 7,083.11 | +189.9 | +198.5 | +205.9 | WAIT |
Investment cos | 7,155.46 | +83.2 | +93.3 | +100.0 | WAIT |
Other finance | 6,639.45 | +197.2 | +215.7 | +224.2 | WAIT |
IT hardware | 1,444.66 | +148.1 | +187.3 | +216.5 | WAIT |
Software & comp svs | 1,315.07 | +129.9 | +142.1 | +148.0 | 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.