The stock market can literally be booming and crashing at the exact same time. It sounds impossible, but the math checks out.
March 27, 2026
Original Paper
Momentum and Reversal on the Short-Term Horizon: Evidence from Commodity Markets
SSRN · 6425598
The Takeaway
Traditional finance theory assumes markets move in distinct cycles of momentum or reversal. This paper proves these effects coexist simultaneously, meaning a commodity's price can be statistically predicted to go both up and down at once depending on whether you analyze the trade volume or the price history.
From the abstract
This paper documents the coexistence of momentum and reversal on the short-term horizon. Utilizing unique investors' position data from commodity futures markets, we decompose returns into a flow component tied to speculators' net trading (Q) and an orthogonal residual component (R nonQ). We find that R nonQ can significantly and positively predict next-week return (short-term return-based momentum), while Q forecasts nextweek return in a negative manner (short-term trading-based reversal). The