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I want to talk about something most traders never think twice about: momentum scores.
Not just whether the market is moving, but how much momentum it actually has behind it and what that tells you about the probabilities for the rest of the day.
Recently, I was tracking a session where the momentum score was sitting right around that illustrious 1.0 level — not quite there, but close.
When you combine that kind of momentum with a strong overnight gap and solid follow-through, you’re looking at a very specific type of trading environment.
Here’s the thing most people miss: When momentum gets that high, it doesn’t necessarily tell you direction is locked in. What it does tell you is that intraday range expectations change dramatically.
And the key to understanding that change is dispersion — the spread of possible price outcomes.
When the trend is mixed and momentum is high, dispersion widens far more than it does during clean bullish environments. In other words, prices can travel much farther in either direction.
That’s not guesswork. It’s simply what the data consistently shows. That widening of dispersion makes neutral-range trades especially interesting because a tiny break in either direction often turns into a sizable move.
In fact, the majority of those days finish outside the narrow early range. If you’re newer and this feels a little technical, that’s okay.
This is one of those concepts that clicks more and more as you see it play out.
What High Momentum Actually Signals
On this particular day, we opened with bullish direction, a nice gap, and strong follow-through. All of that pushed the momentum score higher.
The internals were backing it up too. VIX was continuing lower, GEX was positive, Vold was positive — everything pointed toward a big rally day.
But high momentum doesn’t always mean tight directional consensus. A lot of traders lean too heavily on the VIX, assuming a low VIX means calm, concentrated movement.
The truth is that VIX only tells you expected volatility. It doesn’t tell you how dispersed price is likely to be inside the session itself.
Trend regime plays a massive role, and mixed trend days can produce wide ranges even when VIX is relatively subdued.
On this setup, the matching environment pointed toward a 50-50 directional coin flip — but with huge range potential. And that’s the difference that matters.
We were already up 0.75% by 9:45 a.m., and the momentum score was telling me that an intraday move of 0.8% or more was completely on the table.
This is also where the edge shifts. On days like this, narrow range-bound structures — the classic bullseye-style trades — lose their advantage.
It’s the opposite. Think of something like a tight center-range butterfly with strikes clustered close together. Those kinds of structures get steamrolled because most sessions like this finish outside that center band.
The edge moves to strategies positioned outside the middle. They’re the ones that benefit when price breaks and doesn’t look back.
And if you’re newer and still getting comfortable with dispersion or trade structure differences, don’t stress it. This is the kind of skill that develops naturally as you see more of these environments play out.
How to Use This in Your Trading
I’m not saying you should trade based on momentum scores alone, but they give you context. They help you understand what kind of day you’re in.
When dispersion is wide, this is not a “buy the dip” type of session. You don’t get solid consolidation on one side or the other, so chasing spikes or trying to catch perfect reversals isn’t where the edge lives.
Directional bias just isn’t reliable enough in this regime, no matter how strong the morning looks. Instead, focus on the range itself.
On these days, strategies that target movement out of a defined zone — rather than betting on a specific directional resolution — tend to perform better.
Even a tight breakout approach can be effective because the market doesn’t have to move fast to move far.
The dispersion does the heavy lifting. Because at the end of the day, trading isn’t about predicting what happens next. It’s about understanding the probabilities and positioning yourself accordingly.
And when momentum is high and the trend is mixed, the probabilities shift — not necessarily in direction, but in magnitude.
Now don’t forget to join us at 10 a.m. ET weekdays for Opening Playbook, and at 3:30 p.m. ET Closing Playbook!
Nate Tucci
Tucci Trades
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
