What Is 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. Such a market is sometimes also referred to as a top-heavy market.
A heavy market could find itself vulnerable to toppling over if economic conditions and/or uncertainty worsens. A situation like this could 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. A group of stocks or a market that fails to trade higher on multiple occasions can be said to be heavy.
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.
Example of a Heavy Market
Let's say the S&P 500 is trading near 2500 today, and over the next few weeks the index trends lower day after day. By looking at the chart of the index, there is the appearance of a heavy market because the prices are failing to bounce.
Investors looking to buy shares at a discount will welcome a heavy market. This allows the investor to own shares at a lower price, with more upside potential than if purchased at a higher price.