Trying to Pick Bottom in S&P 500? Watch Momentum Stocks: Chartby
For investors seeking to buy the dip amid the worst equity selloff in 10 months, past leaders may offer some hint on when the bottom is close. According to Vanda Securities, the iShares Edge MSCI USA Momentum Factor ETF, an exchange-traded fund that tracks the best performers in six and 12 months, peaked relative to the S&P 500 Index less than two weeks before the market started rebounding from the last two corrections in August and January. “It wasn’t until the MOMO trade got washed out in late Sept. and mid-Feb. that broader markets were able to find sturdier footing for a rally,” Jason Ambrose, the firm’s chief executive officer, wrote in a note to clients.