Momentum Is Alive and Well
If you think momentum trading faded in the late '90s, it didn't. Momentum manifests itself in myriad futures markets and stocks -- either up or down -- every day. Profiting from momentum, contrary to what most financial advisers tell you, is a matter of market timing and identifying what phase in the momentum cycle a market is in.
A continuum exists in momentum trading. There is a nascent phase, a continuation phase and a reversal phase. Trades can be taken at any point along this continuum. The charts illustrate each of these phases as they unfold in today's markets.
Since logging a pair of limit-down days early last month, July pork bellies (PBN3:CME) have displayed signs of nascent momentum. As I've pointed out before, nascent momentum -- the early phase of a major market move -- occurs when five or more gaps, laps or expansion bars take place in the direction of the underlying momentum within a calendar month. Bellies have registered six of these signals since bottoming in April.

- Loading Comments...
- Loading Comments...
Recent Comments
Featured Photo Galleries
| Dow Jones | S&P 500 | NASDAQ | 10-Year Note | |
|---|---|---|---|---|
| 10,318.16 | 1,091.38 | 2,146.04 | 33.56 |
Oil *
77.53
|
|
DOWN
14.28
|
DOWN
3.52
|
DOWN
10.78
|
UP
0.07
|
10 Yr
3.36%
SPDR Gold
112.94
|
|
-0.14%
|
-0.32%
|
-0.50%
|
+0.21%
|
Data delayed 20 minutes |














