FYI | May 07 2009
By Rudi Filapek-Vandyck
On Monday, I reported the Coppock Indicator had now confirmed a bottom should be in place for the Japanese share market and thus the equities rally since early March should prove more sustainable than the majority of market participants still seems to think it can be.
In addition, the Coppock Indicator appears close to confirming a similar signal for share markets in the US, Europe and elsewhere, including in Australia. Most of these markets only need a small net gain compared to late April to trigger the same signal from the Coppock Indicator as for the Nikkei in Japan.
But is the Japanese share market really the leading indicator for a turnaround in the direction of global equity markets?
I suggested on Monday it was very likely that the Coppock Indicator for Chinese shares had generated a similar signal as for the Nikkei at the end of April. Unfortunately, this was an assessment I had to make on the basis of share market movements since December last year, and my knowledge about how the Coppock Indicator operates, as I did not have access to Chinese data.
With the assistance of FNArena-subscriber Wing I can now confirm my assessment on Monday was correct. The Coppock Indicator (at the bottom of the chart below for those who can see the chart that is included in this story) has clearly drawn out an extended bottom, in negative territory, and has now started to slightly move upward.
This is exactly the point where the Coppock Indicator confirms a bottom should now be in place.
With many thanks to Wing, and to Edwin Coppock of course, FNArena can now report the Chinese share market has seen the lows in this downturn. It’s probably appropriate too that Chinese shares have been the first to signal a recovery process has now started, both for global economies as well as for equities.
