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The Market is Looking Toppy

Market Timing: Get Ready

VectorVest uses a proprietary market trend indicator called the Market Timing Indicator (MTI) to gauge the market's underlying trend. The MTI combines the analysis of three key factors: the broad market movement measured by the VectorVest Composite (VVC), the trend direction and momentum indicated by Relative Timing (RT), and the breadth of these movements through the Buy to Sell Ratio (BSR). The MTI ranges from 0 to 2, where values above 1 indicate an "Up" trend, and values below 1 suggest a "Down" trend. The closer the MTI approaches the extremes of the scale, the stronger the trend signal becomes.

Market Timing Trend Graph - Found on the Homepage

As illustrated in the chart above, historically, when the MTI rises to 1.5 or higher, the market often begins to show signs of peaking, with the likelihood of a downside reversal starting to outweigh further upside potential. By the time the MTI hits 1.5, your portfolio should be largely invested, reducing the need to actively add new positions. Even though the market is trending higher, it’s not accelerating day over day so we should hold off on adding more positions to our portfolios until conditions improve. Now is the time to “Get Ready” for when it becomes "Safe to Buy." However, keep in mind that if the MTI remains above 1.5, it's wise to exercise caution.