Friday, April 3, 2020
Momentum stocks signaling an extended bear market
U.S. stocks with the most price momentum are signaling an extended bear market, according to Jonathan Krinsky, chief market technician at Bay Crest Partners LLC. Krinsky cited the ratio between the Goldman Sachs High Beta Momentum and S&P 500 indexes in a report Wednesday. Goldman’s gauge is based on owning stocks that are rising the fastest and betting against stocks falling the most. The index doubled relative to the S&P 500 this year through March 23, when the ratio set a record. The strength shows investors “sold what they wanted to,” Krinsky wrote -- not what they had to, as they do when bear markets end.
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