Our favorite long-term technical indicator for the stock market – the Coppock Curve – just fired off a very bullish signal.
Over the past 70 years, whenever this same bullish signal flashed, stocks were in the early innings of a massive, multi-year surge higher.
And that’s why we’re confident this time won’t be different.
Which is why you need to be buying this temporary August dip.
We believe this pullback is offering a golden buying opportunity before stocks resume their unstoppable 2023 rally.
Here’s the situation.
Understanding the Coppock Curve Bullishness
Arguably, the market’s most powerful and predictive long-term technical indicator is the Coppock Curve.
The Coppock Curve, also known as the Coppock Indicator, was developed by economist Edwin Sedgwick Coppock in the late 1960s. It’s a technical analysis tool used by traders and analysts to identify long-term buying opportunities in the market.
The Coppock Curve is primarily designed to detect major market bottoms or turning points after significant declines. It’s based on the idea that market momentum tends to shift after prolonged periods of decline. And it aims to provide a way to identify the early stages of a new bullish trend.
This indicator is calculated by adding the sum of the market’s 11-month rate-of-change with its 14-month rate-of-change, then applying a 10-month weighted moving average to that sum. That moving average is then graphed. And typically, it oscillates between deeply negative numbers (very bearish regimes) and highly positive numbers (very bullish regimes).
Crossovers from negative readings to positive readings are considered transitions from bear markets to bull markets.
And we just completed a bullish Coppock Curve crossover for the first time in this cycle.
Bullish Crossover Points to a Boom Ahead
Specifically, in August, the Coppock Curve jumped into positive territory for the first time since 2022. It marks the first bullish Coppock Curve crossover since early 2010 (when stocks were rebounding from 2008 financial crisis and Wall Street was entering a new bull market that lasted for a decade. That itself was the first bullish crossover since late 2003 (when stocks were rebounding from the dot-com crash and entering a new bull market that lasted for five years).
Of course, those comparisons are bullish.
But the manner of this most recent crossover is very specific and even more bullish.
In early 2023, the Coppock Curve on the S&P 500 was sitting in deeply negative territory, around -25. Now the curve is in positive territory.
This happened in early 2010 and late 2003, after the 2008 financial crisis and dot-com crash officially ended, respectively – and before stocks went on a multi-year tear higher.
But it also happened in the early innings of a multi-year bull market in the early 1980s, mid-1970s, early 1970s, and early 1960s!
The Final Word on the Coppock Curve Indicator
You get the point. The stock market just successfully completed a bullish upward thrust on the monthly Coppock Curve. And going back to 1950, that is 100% historically consistent with powerful, new, multi-year bull markets.
Is this time different?
We don’t think so.
We remain confident that we’re in the early innings of a new bull market. And that means prescient investors should buy into the August pullback in stocks before the 2023 rally resumes.
Are you ready for this rebound?
If not, let’s get you prepared.
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On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.