1-16-2013 Comments

[ericoleman]

Hi Mike,

Was the portfolio manager that you reference utilizing options to attain such a stellar performance in a matter of weeks, or was his entry into the housing sector in January of 2012? Really appreciate the comments on cyclical sectors.

Best Regards,

Eric

[Mike]

Hi Mike,

Was the portfolio manager that you reference utilizing options to attain such a stellar performance in a matter of weeks, or was his entry into the housing sector in January of 2012? Really appreciate the comments on cyclical sectors.

Best Regards,

Eric

I don't know for sure but I don't think so as he has never mentioned playing options at any time in the past. He is a margin player for sure and a very good swing trader. He analyzed the group and picked the four stocks that had gone down the most and played these. He entered around Jan 6 of 2012.

[Harry]

Hi Mike,

Regarding the coffee example, do you think it is better to analyze the futures or the ETF to generate the entry signal for coffee using Coppock - understanding one would enter a position using the ETF?

Regards,
Harry

[Mike]

Hi Mike,

Regarding the coffee example, do you think it is better to analyze the futures or the ETF to generate the entry signal for coffee using Coppock - understanding one would enter a position using the ETF?

Regards,
Harry

Harry, I suspect that it would be better to time signals off of the futures contract when buying a commodites etf. I just checked and am seeing the same signal. I attach an image below of the monthly interval chart of coffee futures. I don't intend to trade this signal but am interested in the setup and will look for more setups like this for better testing. In looking back at prior signals on coffee many work, some don't. In the image the far left signal in 1998 didn't work at least not for long. There are five+ coppock buy signals on this chart. in the 2009 signal there is a wiggle that probably comprises two signals, same thing with the repeat 1998 signal in 1999. In the procedure developed for confirming follow-through days on the equity major indices the monthly is monitored for a trough development in the negative half plane (signifies a cyclical bear market shifting to a bull market) and then shift focus to the weekly chart for a fine tuned signal. A monthly chart is a blunt instrument. In the equity market we then look for a follow-through day to be confirmed by the coppock signal in the near vacinity. Plus or minus 4 weeks is a confirmation that shows much improved odds of a tradable rally vs. nonconfirmation. For something like trading coffee or gold a trade trigger is needed which needs some study. Possibly a pocket pivot or base breakout or moving average bounce or all of these.

[Harry]

Mike,

Thank you for the very detailed response! I look forward to re-reading tonight and properly digesting.

Harry

[Harry]

Hi Mike,

When you get a free moment, curious if you would update us on your thoughts regarding gold and the recent Coppock signal?

Best Regards,
Harry

[adam ali]

I don't know if she is an expert or not but here's the link:

http://www.marketwatch.com/story/wha...now-2013-02-06

[Mike]

Hi Mike,

When you get a free moment, curious if you would update us on your thoughts regarding gold and the recent Coppock signal?

Best Regards,
Harry

The last real monthly Coppock signal on GLD was in mid 2001. We are making a close pass now but still in the positive half plane. Coppock buy signals are more valid when the Coppock goes negative first but this close pass may be okay. Note that we are early in Frebruary and the last value used is today's GLD value and not month end. So the flattening out shown on the curve is not a near-buy signal and can't be until month end price occurs.



The weekly Coppock has signaled. This may be enough to enable a rally for at least a while. You can see four buy signals on this chart, the first three seem to signal reasonable buy points. We will see if the current buy signal works.