# Coppock Curve

The Coppock Curve, also known as the Coppock Indicator, is a long-term price momentum indicator used to spot major bottoms in the stock market.

The Coppock Curve was created by E.S.C. Coppock and first published in Barron's Magazine on October 15, 1962.

# Coppock Curve

The Coppock Curve, also known as the Coppock Indicator, is a long-term price momentum indicator used to spot major bottoms in the stock market.

The Coppock Curve was created by E.S.C. Coppock and first published in Barron's Magazine on October 15, 1962.  Coppock was an economist and founder of Trendex Research in San Antonio, Texas. The Episcopal Church asked him to identify long term buying opportunities.

Coppock equated market downturns to bereavements and required a period of mourning. He asked the church bishops how long that normally took for people, their answer was 11 to 14 months and so he used those periods in his calculation.  The Coppock Curve was originally called the Trendex Model.

## Coppock Curve Calculation

The Coppock Curve is used on a monthly time scale.  The indicator is calculated as the sum of a 14-month rate of change and 11-month rate of change of the S&P 500 Index, smoothed by a 10-period weighted moving average.

Coppock Curve = (ROC[SPX,14] + ROC[SPX,11])

Coppock CurveWMA = WMA(Coppock Curve,10)

where:

• Coppock Curve is the monthly value of the indicator
• ROC[SPX,n] is the n month Rate Of Change of the S&P 500 Index
• Coppock CurveWMA is the 10 month Weighted Moving Average

## Interpretation of Coppock Curve

The Coppock Curve is used to determine long term bullish trends for the S&P 500 Index. The indicator is trend-following, and based on averages, so by its nature it doesn't pick a market bottom, but rather shows when a rally has become established.  A buy signal is generated when the indicator is below zero and turns upwards from a trough. In its history, only 4 false signals have occurred. That’s an 83% accuracy rate. The Coppock Indicator can also provide major (infrequent) bear market alerts.  These occur when a double top formation occurs without coming down to the zero line.

Coppock designed the indicator for the S&P 500 index, and it's been applied to similar stock indexes like the Dow Jones Industrial Average. It's not regarded as well-suited to commodity markets.