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Stocks , ETFs

Almost ALL Stock Market Reversals Exhibit This One Trait

A key insight into stock market current momentum indicators

by Bob Stokes
Updated: July 09, 2019

[In a bull market,] slowing upward momentum does not always lead to a stock market high, but nearly all stock market highs are accompanied by slowing upward momentum.

That's from our September 2018 Elliott Wave Financial Forecast.

In other words, it pays to evaluate momentum indicators when you're analyzing the market.

Zooming into the near-term market action, consider this chart and commentary from our July 3 U.S. Short Term Update:


The S&P 500 chart shows that the percentage of its members making new 52-week highs has registered a succession of lower highs relative to the index itself over the past month. This particular measure shows that upward momentum is waning. Last evening, the Daily Sentiment Index ( rose to 88% S&P 500 bulls and 90% NASDAQ bulls. On June 3, the day the stock market's rally started, the NASDAQ DSI was 9%, so investor sentiment is completely the opposite at this juncture.

The U.S. Short Term Update goes on to mention what the combination of momentum and sentiment measures suggest for the rally in the near term.

But what about the larger picture?

Our new July Elliott Wave Financial Forecast gives you answers when it shows you a 32-year chart of major world stock indexes and compares their momentum indicators.

The Shanghai Composite Index, MSCI Emerging Markets Index, Euro Stoxx 50 Index and the Nikkei 225 Index -- one global index after another, you see the current momentum signature the world over.

Take a look at this 32-year chart for yourself, risk-free. It's a picture not to be missed.

Look below for instant-access details.

Does Keeping Up with Stock Market "Fundamentals" Even Matter?

The daily information flow is too vast for any one investor to follow. Yet here's the good news:

Even if you could consume all market-related news …

… You don't need to. Indeed, basing your investment decisions on "fundamentals" can be counter-productive.


Contrary to popular belief, the stock market's trend is NOT governed by earnings, economic data, politics, trade wars or any other "news."

It's governed by investor psychology, as reflected by the Elliott wave model.

Find out what our Elliott wave experts are saying to subscribers, so you can position your portfolio for the dramatic changes that our analysts see just ahead.

Read below to learn how to get started with our risk-free trial …

Elliott Wave International’s Financial Forecast Service

All month long, FFS shows you the patterns in U.S. stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. We show you where the trend is now, and when prices should turn -- specifically, we show the pattern at multiple degrees of trend, with precise risk/reward calculations. If you have fewer surprises, you can be better prepared.

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  3. 3. Peter Kendall, Author of The Mania Chronicles and Co-editor of The Elliott Wave Financial Forecast

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