Category: Quant Insight

Most stock indices reached new all-time highs on 11/30 which coincided with all-time highs for their respective advance decline lines. This bodes well for stocks as it indicates health in both momentum and the breadth of that momentum. Energy commodities did retreat last week resulting in a notable pull back in short-term momentum, we believe this may have been part of a broader pull back in foreign currencies and risk assets, so time will tell.

Momentum measures the rate of acceleration, either positive or negative, in a security’s price and may indicate which markets are positioned for gains or losses. Investing based on momentum entails establishing long positions in securities with positive recent returns and short positions in those with negative recent returns. Momentum in asset classes may illustrate the development of trends in the market.

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