Momentum Still with the Bulls

Momentum is a key variable in evaluating the energy of a given trend. One measure I use to look at the momentum of the S&P 500 is the "P Momentum" Indicator. "P" is short for Pring as in Martin Pring who has an indicator that takes into account these same variables. This model is just one in my toolbox but useful when evaluating the bull or bear market.

One fact the model does tell us is this - when there is a change in the trend, each of the four ROC's all roll over within three months (as they did in 2007 and upward in 2009). The current drubbing we are getting in stocks (the last few days not included) has not reversed the movement of the long term ROCs. Thus in conjunction with many of my other indicators, this is one major correction and the lows for 2010 are probably in.

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