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The Stock Market Momentum Indicator is a proprietary stock market indicator created by the Commodity Research Bureau (crb). It is mainly used to determine the general direction of the market. Based on S&P 500 stock prices, this indicator analyzes some stocks and calculates the ratio of the percentage of those who are trading above their 50-day simple moving average.
According to crb, the Stock Market Momentum Indicator should be smoothed with two moving averages (10-day and 25-day). The basic interpretation consists of the following: The market is in a downtrend when the 25-day moving average turns down and crosses above the 10-day moving average. There are a couple of things you can do to filter out some false signals that may be generated by the latter rule. For example, you can remove signals that occur while the 25-day moving average of the stock market momentum indicator is far from 0 or 100. Other methods include using oversold/overbought indicators or divergence patterns.
More information can be found here:
http://www.crbtrader.com/crbindex/smmi.asp
This indicator is created in QuantShare by downloading its data from crb website. The data spans from 1992 to the present and it is associated with the following ticker symbol: ^SMMI
Note that the Stock Market Momentum data is available in Excel format and thus you must have Excel installed on your computer in order to use this downloader.
Trading financial instruments, including foreign exchange on margin, carries a high level of risk and is not suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in financial instruments or foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and seek advice from an independent financial advisor if you have any doubts.
