Market Momentum Hits Polar Extremes As Stocks Test Bull Trend

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by Kimble Charting

The latest stock market correction and swing lower has seen momentum drop to extreme lows (on a intermediate-term basis). This poses a bit of a conundrum because stocks have been struggling since hitting historic longer-term momentum highs.

So what do investors make of this going forward? Let’s look at a couple of four-pack charts.

The first 4-pack of charts looks at the “daily” Equal Weight S&P 500, Russell 2000, Dow Transports and NYSE Composite. All of these important stock indexes are in horizontal trading ranges with momentum at the lowest levels in the past couple of years.

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This has helped stocks bounce nearly 8 percent off the lows.

Stock Market Index “Ranges” (support at momentum lows)


The next 4-pack of charts is a longer-term look at “monthly” bars for the Equal Weight S&P 500, Russell 2000, Dow Transports and NYSE Composite.  In addition to testing the bottom of their trading ranges, the stock indexes are also testing 8-year+ rising support at each (1)… with momentum at/or above 2007 levels.

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How these two timeframes reconcile will be important for investors.

If support at each (1) would give way, monthly momentum has a long way to go to get oversold. From a big picture perspective, the support test a (1) could be huge!

This article was first written for See It  To see original post CLICK HERE


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