Waning Momentum and Strength: A Look at Two Indicators
After once again topping out ahead of price--a common pattern--my short-term measure of market momentum (bottom chart) has moved to neutral territory, but is above the levels that have been recently associated with market bottoms. We're also seeing new 20-day lows among NYSE, NASDAQ, and ASE stocks running ahead of new highs. Note how new highs vs. lows lagged significantly at the recent price highs. As long as new 20-day lows exceed new highs and short-term momentum is weakening, my stance on the market is defensive..