Coppock Curve

What it is

The Coppock Curve is a long-term momentum indicator created to identify major bottoms in stock market indexes. Edwin Coppock designed it in 1962 for monthly charts — reportedly inspired by the idea that markets, like people, need time to grieve after a loss — and it became famous for flagging durable bull-market starts. It is a smoothed sum of two rates of change, plotted as a single line around zero.

How it is calculated

Two rate-of-change values are computed on the chosen price source — a long ROC (default 14 periods) and a short ROC (default 11 periods) — then added together. That sum is smoothed with a weighted moving average (default 10 periods), which gives the most recent momentum readings the most influence. On the monthly charts it was designed for, the 14/11/10 defaults correspond to Coppock's original months-based settings.

How to read it

The "coppock" line oscillates around the flat "zero" level. The classic signal is not the zero cross itself but the turn: after the line has fallen below zero, an upturn — the first month the line rises from a trough — was the reading Coppock watched for in the index. The zero line separates broadly positive long-term momentum from negative. The indicator was designed only to find bottoms; Coppock never published a sell rule, and downturns above zero are a much weaker, unofficial reading.

What to look for

• Turning patternUpside

  The "coppock" line turns upward from a trough below zero — the reading Coppock originally watched for on monthly index charts.

• Centre-line crossUpside

  The line crosses above zero, confirming that long-term momentum has turned positive (a later, more conservative read than the trough upturn).

• Centre-line crossDownside

  The line crosses below zero, showing long-term momentum has turned negative — often long after the price peak.

• DivergenceContext

  Price makes a new extreme that the Coppock line does not match, suggesting the long-term move is losing momentum.

When to use it

The Coppock Curve is at home on monthly charts of broad stock indexes — that is what it was designed and validated for — and secondarily on weekly charts of indexes, ETFs, and large-cap stocks. It is a patient, big-picture tool for identifying the start of multi-year advances. It is not suited to intraday or even daily trading, to short-lived instruments without years of history, or as a sell-signal generator.

Works well with

Settings explained

longRocPeriod

Lookback of the longer rate of change. The default 14 matches Coppock's original 14 months. Raising it makes the curve respond to even longer cycles; lowering it shortens the indicator's horizon.

shortRocPeriod

Lookback of the shorter rate of change, default 11 (Coppock's 11 months). Keeping it close below the long period preserves the intended overlap of the two momentum windows.

wmaPeriod

Length of the weighted moving average applied to the ROC sum, default 10. A longer WMA gives a smoother, slower curve with later turns; a shorter one lets more noise through.

source

The price field the rates of change are computed on. Close is the standard choice for index work; other sources are rarely used with this indicator.

Limitations and common mistakes

• It was designed for monthly index data — applied to daily or intraday charts it becomes just another slow oscillator with no validated track record.
• Coppock defined only the upturn from below zero; there is no symmetric rule for tops, and improvised ones lag badly.
• Signals are rare and very late by short-term standards — that is by design, but it makes the tool useless for timing entries within a trend.
• Long lookbacks mean it needs years of history before the first meaningful reading.

References

• Origin: Edwin S. C. Coppock, 1962.
• Coppock curve — Wikipedia (opens in a new tab)

This page explains how an indicator is calculated and read. It describes past data, not what price will do next, and it is not a recommendation to trade. Read the disclaimers.

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