A
- Advance-Decline LineA cumulative measure of market breadth that adds the daily net of advancing minus declining stocks; divergence from the index often precedes major reversals.
- Asset AllocationThe strategy of dividing a portfolio among different asset classes — stocks, bonds, cash — to balance risk and return across different market conditions.
B
- BacktestingSimulating how a trading strategy would have performed on historical price data — useful for testing ideas, but not a guarantee of future performance.
- Bear MarketA sustained period of falling stock prices — typically a decline of 20% or more from a recent high — often accompanied by economic contraction and fear.
- Bull MarketA sustained period of rising stock prices — typically defined as a gain of 20% or more from a recent low — associated with economic expansion and optimism.
C
D
- Death CrossA bearish signal when a short-term moving average (e.g. 50-day) crosses below a long-term moving average (e.g. 200-day).
- Dollar-Cost AveragingInvesting a fixed amount at regular intervals regardless of price, automatically buying more shares when prices are low and fewer when prices are high.
- DrawdownThe percentage decline from a portfolio's peak value to its subsequent trough — the primary measure of downside risk and emotional pain.
E
F
- Fear and Greed IndexA composite sentiment gauge scoring investor mood from 0 (extreme fear) to 100 (extreme greed) using several market-based inputs.
- Federal ReserveThe U.S. central bank; its monetary policy decisions — particularly interest rate changes — are among the most powerful drivers of equity market conditions.
G
I
M
- MACDMoving Average Convergence Divergence — a momentum indicator built from the difference between a 12-period and 26-period EMA, with a 9-period signal line.
- Market BreadthA measure of how many individual stocks are participating in a market move; breadth confirms — or calls into question — the health of an index-level signal.
- Market SentimentThe overall attitude of investors toward the market — ranging from extreme fear to extreme greed — used as a contrarian timing input.
- Market TimingAttempting to predict future price movements to decide the optimal moments to buy or sell — versus staying fully invested through the cycle.
- Maximum DrawdownThe largest single peak-to-trough loss experienced over a given period — the benchmark for the worst-case risk of a strategy.
- Moving AverageA continuously updated average of an asset's price over N periods, used to smooth out noise and reveal the underlying trend direction.
O
- On-Balance VolumeA cumulative volume indicator that adds volume on up-days and subtracts on down-days to detect accumulation or distribution before a price move.
- OverboughtA condition where an asset has risen sharply enough that momentum indicators (like RSI above 70) suggest it may be due for a pullback.
- OversoldA condition where an asset has fallen sharply enough that momentum indicators (like RSI below 30) suggest a potential rebound.
R
- Recovery TimeHow long it takes a portfolio to return to its prior peak after a drawdown — a hidden cost that determines whether a timing strategy is worth pursuing.
- Relative Strength Index (RSI)A momentum oscillator measuring the speed and magnitude of recent price changes on a 0–100 scale; above 70 is conventionally overbought, below 30 oversold.
- Resistance LevelA price level at which selling pressure has historically been strong enough to halt or reverse an upward move.
S
- SeasonalityRecurring calendar-based patterns in market returns — such as 'Sell in May' or the year-end rally — observed across decades of historical data.
- SignalAn indicator reading or market condition used as a trigger to buy, sell, or hold — subject to false positives (whipsaws) and varying reliability by market regime.
- Simple Moving AverageThe arithmetic mean of closing prices over the last N periods — each day receives equal weight.
- Support LevelA price level at which buying interest has historically been strong enough to halt or reverse a downward move.
- Systematic ModelA rules-based approach to timing that removes emotional discretion by mechanically following predetermined signals and rebalancing rules.
T
- Timing CostThe opportunity cost of missing the market's best trading days by being out of the market — the core argument against imprecise timing strategies.
- TrendThe general direction of an asset's price over time — uptrend (higher highs and higher lows), downtrend (lower highs and lower lows), or sideways.
V
W
About this glossary
These definitions are written by the StockTiming Research desk. Every entry explains not just what a term means but where it tends to fail — because understanding the failure modes is as important as understanding the concept itself. Editorial standards →