A market is seen as ‘toppy’ when it reaches a perceived price ceiling. Investors will refer to markets being toppy when they see prices as at their limit or even inflated. In such a circumstance they will expect a ‘correction’ whereby a market can lose 10-20% of its value to come back in-line with price expectations.
A market sector such as property or a commodity such as gold or oil might be seen as toppy if it has experienced a significant and pro-longed rise in price. Investors will look at reasonable demand and the rest of the related markets and decide whether the current valuations are accurate. If not, the market could be prescribed as ‘toppy’ indicting its top has been reached and it is now likely to go down.