Societe Generale’s Albert Edwards points us to a terrifying technical sell signal in the S&P 500: the “killer wave.” This formation was identified by Investors Chronicle’s Dominic Picarda.
Here’s how it works. The Coppock indicator–an esoteric momentum measure (Wikipedia description) –turns down giving a sell signal. This happened last summer. Before the indicator dips below 0, it moves up again, which it did in April of this year. The “killer wave” formation is completed when the Coppock indicator turns again. And what happens next is real ugly.
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