Trending Down

Market Timing: Be Defensive

Now is the time to sit on the sidelines, tighten stops, or play the market to the downside.

Market Direction as the Primary Driver

  • The overall market trend strongly influences your chances of success.

  • Saying to remember: “A rising tide lifts all boats.”

  • In an upward market, more stocks rise than fall, increasing the likelihood of picking winners.

  • In a declining market, even top-performing stocks can struggle.

The VectorVest Composite (VVC)

  • The VVC is VectorVest’s broad-market index and the foundation of its stock market analysis.

  • It is an arithmetic indexed average of all the stocks in the VectorVest database.

  • Because it includes a wide breadth of stocks, it reflects the overall market more accurately than other major indexes.

Why the VVC Matters

  1. Traditional indexes (e.g., Dow Jones, S&P 500) can show mixed results, leading to confusion about the market’s true direction.

  2. The VVC provides a clearer view of the overall trend.

Market Timing Signals

  • VectorVest has developed market timing signals based on VVC movements.

  • These signals help identify the current trend of the market.

  • Core philosophy:

    • Buy rising stocks in a rising market.

    • Avoid buying when the market is in a downward trend.

Definition of “Trending Down”

  • VVC is moving lower on a week-over-week basis.