The Market is Looking Toppy

Market Timing: Get Ready

Time to get your shopping list ready and be prepared to buy stocks when it’s safe to buy.

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 as 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 0.00 to 2.00, where values above 1.00 indicate an "Up" trend, and values below 1.00 suggest a "Down" trend. The closer the MTI approaches the extremes of the scale, the stronger the trend signal becomes.

Historical examples of market downside reversals following the MTI reaching 1.5.

Historically, when the MTI reaches 1.50 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 reaches 1.50, portfolios should be largely invested, reducing the need to actively add new positions. However, since the market trend is still technically "Up," it’s still OK to buy stocks with caution.