Coppock Curve

Parameters: roc_long = 14 (10–20) • roc_short = 11 (5–15) • wma_period = 10 (5–20)

Overview

The Coppock Curve has a remarkable origin story. In 1962, economist Edwin Coppock was asked by Episcopal church bishops about the optimal time to buy stocks after major market declines. After consulting with an Episcopal priest, he learned that the average mourning period for loss is 11-14 months. Applying this psychological insight to markets, Coppock designed an oscillator with one sole purpose: to identify the commencement of bull markets after periods of market "mourning."

First published in Barron's October 1962 issue, the Coppock Curve was specifically engineered to signal when major indices have bottomed out, giving investors opportunities to enter at discounted levels. While now rarely discussed among modern traders, its historical track record of identifying significant market turning points keeps it relevant for patient, long-term investors in 2025 who focus on timing major market entries rather than frequent trading.

Interpretation & Trading Signals

Primary Buy Signals:

  • Zero Line Cross: When curve crosses above zero from negative - new bull market beginning
  • Curve Turns Up: Bottoming signal when curve turns up while still below zero
  • Historical Success: S&P 500 often enters strong bull runs after positive Coppock signals
  • Sell Signals: Less emphasis on sells - designed primarily for bull market identification

Optimal Application (2025):

  • Best Markets: Major indices like S&P 500, Nifty 50 - reduces false signals vs individual stocks
  • Original Timeframe: Monthly charts for long-term investors (signals are infrequent)
  • Modern Adaptation: Can use on hourly, daily, minute charts with adjusted parameters
  • Lagging Nature: Reacts to historical data - expect delay before market move signals

Trading Strategy Enhancement:

  • Combine Indicators: Use with moving averages, RSI, stochastic for signal confirmation
  • Risk Management: Always use stop-loss orders to limit potential losses
  • Long-Term Focus: Built for investors in the game for the long haul, not day traders
  • Psychology-Based: 11-14 month ROC periods mirror human grieving/recovery cycle

Example Usage

Code examples will be available once the Rust implementation is complete.

Performance Analysis

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