DEFINITION of 'Toppy'

A slang term used when markets are reaching highs that are unstable, and therefore a decline can be expected. In the U.S. the Dow Jones Industrial Average, the Nasdaq and the S&P500 are all used to gauge the overall market. The term "toppy" is used when these indexes are rising, but there is analyst sentiment indicating a potential decline.

BREAKING DOWN 'Toppy'

The market moves in cycles along with the economy. The indexes (representing the stock market) will climb to new highs then fall back down. The fall is known as many things such as a pullback, a dip or a retracement. Before this fall, analysts use the term "toppy," meaning that the market is reaching a top and might come back down.

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