by John Lounsbury
There is an interesting stock market indicator circulating around the internet today (Thursday, September 15). It is called the Killer Wave indicator and has given a sell signal eight times in the past 83 years, preceding every major bear market, according to Dominic Picarda of Investor’s Chronicle. The average loss following these signals has been more than 39%, so the track record is pretty good. The record is such that it has gotten my attention.The signal is based on a pattern in the Coppock Curve. This is an oscillator developed in the early 1960s to identify when bottoms in the stock market had bee safely passed. It has since been used also to identify when peaks in markets are near. It is not an exact timing tool; some signals have occurred 1-2 years before an eventual top. However, it has a 100% record in predicting that a major decline is coming soon and has yet to “misfire”. For further details, see Wikipedia.
Dominic Picarda has a video explaining the Killer Wave in some detail, shown below.
Click on image below to watch the Killer Wave video.
Some of the current discussion about the Coppock Curve on the internet can be found at Investors Chronicle, Business Insider and The Financial Times.
One of the persons publicizing the Killer Wave is Albert Edwards of Societe General, who is an extreme bear, having forecast the S&P 500 index reaching a low around 400 in the next few years.
Note: GEI Associate Ghamal de la Guardia has posted a detailed analysis of the Killer Wave entitled “Killer Wave not Always a Killer”
Related Articles
Flag Signals by David Grandey
The DAX Crash by Doug Short
Real Returns: Nikeii and S&P 500 by Doug Short
Market Red Ink Update 9/6/11 by John Lounsbury
Markets Will Rally to Year End by Ben Warwick
August Investment Review by MacroTides
Is the End Near – Or Is It Different This Time? by Ed Easterling
Do You Want to Ride Through another Bear Market? by MacroTides
It’s Time to Bail on Bank Stocks by Martin Hutchinson
Investing in a Volatile Market by David Grandey
Gundlach Sees Cusp of a Global Banking Panic by Robert Huebscher
Why the U.S. Credit Rating Downgrade Could Cause a Full-Fledged Market Crash by Jason Simpkins
Elliott Waves: Potential High for Stocks and Low for Dollar by Avi Gilburt
Investors: The News is Getting Even Worse by Art Patten
