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. Market Sentiment

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

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

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

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

    The Dow Jones Industrial Average is a price-weighted average ...
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  1. What technical tools can I use to measure momentum?

    One of the main goals of every trader using technical analysis is to measure the strength of an asset's momentum and the ... Read Full Answer >>
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  3. Where can I buy penny stocks?

    Some penny stocks, those using the definition of trading for less than $5 per share, are traded on regular exchanges such ... Read Full Answer >>
  4. How does the stock market react to changes in the Federal Funds Rate?

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  5. How do I place an order to buy or sell shares?

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