DEFINITION of 'Heavy'

Heavy is a description of a market that is demonstrating difficulty in advancing and displaying a tendency to decline. A heavy market may be a manifestation of investor uncertainty about near-term direction, and a sign that the market is topping out. It may also be characterized by a shortage of buyers, many of whom may prefer to stay on the sidelines until the uncertainty abates, and an abundance of sellers. Such a market is sometimes also referred to as a top-heavy market.

BREAKING DOWN 'Heavy'

A heavy market could find itself vulnerable to toppling over if economic conditions and/or uncertainty worsen, as this would exacerbate the imbalance between buyers and sellers of stocks. As such, a heavy market could be interpreted as a signal of, or precursor to, a potential steep decline in the near to medium-term. Clues of a heavy market may exist in aggregate numbers (e.g., bid-ask volumes of major indices), but often "heavy" is something that experienced traders can feel. It's more of an intuition rather than a quantification. Market direction can also change quickly with the release of supportive economic data, positive earnings surprises of bellwether companies, or reinvigorated investor sentiment. Thus, what may feel heavy to traders, turning them cautious, could reverse into a new leg up in a bull market.

Investors who pick up on the sense that the market is heavy may act to lock in gains, hedge long positions, or even short the market if they are bolder. Those advocating that investors stay fully invested at all times simply ignore signs of heaviness in the market. Since market timing is notoriously difficult, financial planners typically advise that the average saver/investor keep adding funds to their equity holdings, no matter the perceived "weight" of the market.

RELATED TERMS
  1. Heavy Industry

    Heavy industry refers to a type of business that usually carries ...
  2. Buyers/Sellers On Balance

    Buyers/Sellers on balance describe a predominance of either buying ...
  3. Seller Financing

    Seller financing refers to a real estate agreement where financing ...
  4. Weak Shorts

    Weak shorts refer to traders or investors who hold a short position ...
  5. Breakdown

    A breakdown is a price movement through an identified level of ...
  6. Back-To-Back Letters Of Credit

    Back-to-back letters of credit are used together to help a seller ...
Related Articles
  1. Trading

    Heavy Construction Stocks Leading Market Higher

    Heavy construction stocks are rallying aggressively. Watch these price levels to help determine where they are headed next.
  2. Investing

    Ending The Limits On U.S. Crude Oil Exports

    As US storage capacity reaches its limit, industry participants and their lobby groups in Washington are calling for an end to the crude oil exports ban.
  3. Investing

    6 Funds With Heavy Apple Exposure (AAPL)

    If you think Apple will continue to slump you might want to avoid these mutual funds and ETFs, which have heavy exposure.
  4. Insights

    Will Trump Be Good for Baytex Energy? (BTE)

    Market analysts suggest that a Trump presidency may increase the odds of an OPEC deal, which benefits heavy oil producers like Baytex.
  5. Investing

    Intel Shares Are Poised to Surge, Traders Say

    Options traders are betting that Intel stock will climb by mid-November.
  6. Investing

    The Ins And Outs of Seller-Financed Real Estate Deals

    There's more than one way to buy or sell a house. Seller financing presents yet another unique option.
  7. Tech

    Elon Musk's SpaceX to Launch World's Most Powerful Rocket Today

    The Falcon Heavy will send an old Tesla Roadster sports car into Mars’ orbit.
  8. Tech

    Jeff Bezos Wants to Colonize the Moon

    Amazon’s CEO has big plans for his privately-funded spaceflight company Blue Origin.
  9. Trading

    Biotechs to Buy After Trump Victory (CELG, BIIB)

    The Trump win eases political pressure on biotech and pharmaceuticals stocks, allowing them to end their long corrections.(CELG,BIIB,SGEB)
  10. Investing

    Finding Short Candidates With Technical Analysis

    Learn how to distinguish tops and bottoms in the equity market when short selling.
RELATED FAQS
  1. What is a heavy oil differential and how does it affect oil producers?

    Learn what the phrase "heavy oil differential" refers to and the significance of heavy oil differentials for oil production ... Read Answer >>
Trading Center