Market Momentum
What is Market Momentum?
Market momentum is the perceived strength of a positive or negative change in market prices.
How Does Market Momentum Work?
Market momentum is the ability of a market to sustain an increase or decrease in prices. Market momentum is a function of a price change during a specific period of time versus the trading volume during that period. In other words, high trading volume increases the market momentum of a price change and vice versa. For example, if the S&P 500 Index rises 100 between Monday and Tuesday in conjunction with heavy trading, the S&P is likely to sustain an upward trend in the days to come.
Why Does Market Momentum Matter?
In technical analysis, anticipatory indicator gives a signal in advance of other market action. Momentum indicators such as RSI or stochastics are anticipatory indicators that technical analysts believe can be used to predict changes in price.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
