Inertial Mass as a Predictor of Reversal Depth: A Newtonian Framework for Asset Momentum

This paper introduces M_stable, an inertial mass measure for financial assets derived from an explicit analogy to Newton's second law (F = ma), in which 60-day average trading volume proxies for the aggregate force acting on an asset and 60-day average absolute return proxies for price acceleration. The central finding is that higher M_stable at the time of a momentum signal predicts a shallower subsequent reversal. The relationship holds with a negative sign across all six asset classes tested (equities, fixed income, and commodities; 2000–2024), with a pooled weighted Spearman correlation of −0.208 (p < 0.001). M_stable achieves sign consistency in 6 of 6 assets, compared with 4 of 6 for market capitalization and 1 of 6 for volume rate of change. For SPY, M_stable explains roughly thirty times more variance in reversal depth than capitalization alone (R² = 0.126 vs. 0.004). Qualitative validation shows that the ten strongest signals for SPY coincide predominantly with documented market stress episodes including the 2008 Global Financial Crisis, the 2010 Flash Crash, and the 2018 Volmageddon selloff, supporting the economic plausibility of the construct. Practical applications include position sizing under elevated reversal risk, volatility-buying strategies when M_stable is low, and portfolio construction tilted toward markets with greater structural shock-absorption capacity.