Market Timing: Be Defensive
Now is the time to sit on the sidelines, tighten stops, or play the market to the downside.
Why Market Trend Matters
A rising market generally lifts most stocks. The reverse is also true.
In bullish conditions:
More stocks participate in rallies.
Even weaker companies can rise in price.
In bearish conditions:
Even strong, fundamentally sound stocks can decline.
The VectorVest Composite (VVC)
What it is:
An arithmetic indexed average of all the stocks in the VectorVest database.
Provides a broader, more accurate picture of market movement.
Why it matters:
Major indexes (e.g., Dow, S&P) can show mixed results, creating confusion.
The VVC cuts through that noise, showing the true market trend.
How VectorVest helps:
Market timing signals highlight the current trend.
Core philosophy: Buy rising stocks in a rising market; avoid buying in a downtrend.
Let the Trend Be Your Friend
The “Be Defensive” scenario signals:
The market is in a downtrend.
Conditions strongly favor protecting capital.
What to do:
Stop buying stocks.
Trim weak or losing positions.
Tighten stops on existing holdings.
If risk tolerance allows: use inverse ETFs, short stock positions, or put options.
Market Timing Trend Graph
The chart shows clear red “Be Defensive” signals when the market is falling.
These signals:
Provide visual confirmation of broad market weakness.
Help you step aside and protect capital until conditions improve.
Market Timing Trend Graph - Found on the Homepage