Mar
9
Patterns for the Momentum Monkeys, from Mick St. Amour
March 9, 2010 |
An observation that I've made in the past and see developing is that when you see markets and sectors move up on on higher volume, the tendency is for momentum types to pick up more on pullbacks around 50 day moving average area. That seems to be pattern developing in high beta areas. That looks like the playbook being used by the momentum folk.
Anatoly Veltman comments:
The equivalent indicator in futures markets (as distinct from individual stock trading) is Open Interest. An underlying (I'm being careful not to use the language "a futures contract", which may be incorrectly coded by some as a single delivery month) that rises in price on increasing total O.I. — should also be bought, like in your example. It's of extreme importance for novice coders to understand: volume is largely meaningless in futures. O.I. replaces Volume, once you transition from Stocks arena to Futures.
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