Momentum

Category: Quant Insight

Short-term and long-term momentum continue to be out of sync with little direction among bonds and currencies. Long-term momentum among stocks is still positive. Without a breakdown in short-term momentum, we think they are likely going to move higher. Energy commodities appear to be moving into a bull market as both long- and short-term momentum are rising.

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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