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Is Coppock related to Poppycock???
Andreas Grau wrote:
> All,
>
> I took the following text from the Equis web-page:
>
> <snip>
> The oscillator is also based on adaptation-level, although in a
> slightly different way. Oscillators generally begin by calculating a
> percentage change of current price from some previous price, where the
> previous price is the adaptation-level or reference point. The mind is
> attuned to percentage changes because they represent returns. If you
> bought Microsoft Corp. stock (MSFT) at $50 and it goes to $80, you
> make 60% before dividends. If you bought Berkshire Hathaway (BRK) at
> $4,000 and it rises to $4,030, the same dollar gain, you make 0.75%
> before dividends. It's the percentage change that counts. Relativity
> again.
>
> Coppock reasoned that the market's emotional state could be determined
> by adding up the percentage changes over the recent past to get a
> sense of the market's momentum (and oscillators are generally
> momentum indicators ). So if we compare prices relative to a year
> ago - which happens to be the most common interval - and we see that
> this month the market is up 15% over a year ago, last month it was up
> 12.5% over a year ago, and 10%, 7.5% and 5%, respectively, the months
> before that, then we may judge that the market is gaining momentum
> and, like a trader watching for the upward crossover of the moving
> average, we may jump into the market."
>
> The MetaStock™ formula for the Coppock Curve is:
>
> (MOV(ROC(MOV(C,22,S),250,%),150,E))/100
>
> <snip>
>
> While I can accept the idea behind, I wonder if comparing years is
> still
> a valid approach for fast changing high-techs - can someone please
> elaborate on that? I am especially curious, if Coppock can be regarded
> as a long-term indicator, valid for defining entry/exit-points. Can
> coppock be regarded as an "adaptive support/resistance-line"?
>
> Kind regards from Germany,
>
> Andreas
>
> N.B. Please accept my excuses for extensively quoting from a probably
> well known text.
>
> ---
> Andreas Grau
> Reality is an illusion - Perception is what counts
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