Market Momentum


DEFINITION of 'Market Momentum'

A measure of overall market sentiment, calculated as the change in the value of a market index multiplied by the aggregate trading volume occurring within the index components.

BREAKING DOWN 'Market Momentum'

Market momentum can be a good indicator of overall market changes which are likely to continue in the near future. It is important to understand that momentum considers not only changes in price level, but also volume. For example, if the Dow Jones Industrial Average (DJIA) was up significantly over several trading days, this price movement would be said to have more force, or momentum, if it occurred with heavy trading volume as opposed to low volume.

  1. Index

    A statistical measure of change in an economy or a securities ...
  2. Volume

    The number of shares or contracts traded in a security or an ...
  3. Momentum Fund

    Investment funds that invest in companies based on current trends ...
  4. Dow Jones Industrial Average - ...

    The Dow Jones Industrial Average is a price-weighted average ...
  5. Market Sentiment

    The overall attitude of investors toward a particular security ...
  6. Momo Play

    A slang term used to describe an advanced trading strategy based ...
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