What is Stock Market MOMENTUM?

By Staff Reporters

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It’s useful to look at stock market levels compared to where they’ve been over the past few months. When the S&P 500 is above its moving or rolling average of the prior 125 trading days, that’s a sign of positive momentum. But if the index is below this average, it shows investors are getting skittish.

  • Momentum is the speed or velocity of price changes in a stock, security, or tradable instrument.
  • Momentum shows the rate of change in price movement over a period of time to help investors determine the strength of a trend.
  • Investors use momentum to trade stocks whereby a stock can exhibit bullish momentum–the price is rising–or bearish momentum–the price is falling.

The Fear & Greed Index uses slowing momentum as a signal for Fear and a growing momentum for Greed.

CITE: https://www.r2library.com/Resource/Title/0826102549

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