Quantitative Strategies for Momentum and Trend Reversal: Integrating Macroeconomic Factors, Advanced Signal Processing, and Regime Awareness

This paper provides a comprehensive review of momentum and trend reversal phenomena from a quantitative finance perspective. We explore the seminal works on momentum strategies, including both cross-sectional and time-series approaches, and delve into the behavioral finance theories that seek to explain these market anomalies. The paper further investigates the phenomenon of momentum crashes, which are characterized by sudden and severe reversals, and their relationship with market volatility and investor sentiment. Finally, we examine contrarian and mean-reversion strategies as potential tools for navigating and capitalizing on trend reversals. Our analysis synthesizes key findings from the academic literature, providing a structured overview of the quantitative methods and theoretical frameworks used to understand and model these persistent market dynamics.