- Solve real problems with our hands-on interface
- Progress from basic puts and calls to advanced strategies
Interactive Options Course
Posted August 7, 2025 at 9:21 am
1/ Momentum Index Makes Investing Look Easy!
2/ Healthcare – Inverted Scale
3/ Clean Energy – Trend Change Attempt
Investopedia is partnering with CMT Association on this newsletter. The contents of this newsletter are for informational and educational purposes only, however, and do not constitute investing advice. The guest authors, which may sell research to investors, and may trade or hold positions in securities mentioned herein do not represent the views of CMT Association or Investopedia. Please consult a financial advisor for investment recommendations and services.
Momentum Index Makes Investing Look Easy!
Over the last 3yrs, the S&P 500 Momentum Index has outperformed the S&P 500 by nearly 2x. The index selects 100 stocks in the S&P 500 with the strongest risk-adjusted momentum over the past 12 months—excluding the most recent month to avoid short-term reversal bias. The index rebalances twice a year, and weights holdings based on both momentum scores and market cap, with sector caps in place to keep things diversified. It’s designed to track the persistence of strong price trends across large-cap U.S. stocks.
This week, the index achieved yet another all-time closing high. The S&P 500 Index is one tough denominator – yet this momentum index has consistently outperformed and is displaying no sign of letting up!
Healthcare – Inverted Scale
The Healthcare sector has been out of favor for quite some time. Underperforming even cash assets over the trailing 3yrs. When price has reached an extreme in either direction, I find it valuable to invert the price scale and re-evaluate.
I’ll ask myself the same question I always do when analyzing stock prices, “Do I want to own or sell this asset.” When inverted, the chart formed a bullish accumulation pattern for all of 2024 – finally breaking out in April 2025. Now, price sits atop a well-defined support/resistance zone and continues to bump its head on $130/share. All this information supports a bullish view of the asset. It may seem frivolous but as a technician, this simple exercise helps keep my biases in check.
Clean Energy – Trend Change Attempt
Clean Energy is an industry group held captive in a downtrend for nearly 5-years. Price is now finally trading above an upward sloping 200-day average – however a trend change is yet to officially occur. For the asset to change trend, we must see higher highs and higher lows. The index is struggling to breakout above a well-tested support/resistance zone. A zone that also marks the 2020 COVID lows.
This chart is a good example of when to apply simple if-then statements to your investing process. For example, if price is > X then we own the asset. If price is < X then we sell the asset. Simple, but extremely effective!
—
Originally posted 07th August 2025
Investopedia.com: The comments, opinions and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment or strategy. This information is intended for US residents only.
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Investopedia and is being posted with its permission. The views expressed in this material are solely those of the author and/or Investopedia and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Any discussion or mention of an ETF is not to be construed as recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Related Articles
Join The Conversation
For specific platform feedback and suggestions, please submit it directly to our team using these instructions.
If you have an account-specific question or concern, please reach out to Client Services.
We encourage you to look through our FAQs before posting. Your question may already be covered!