Until recently, many of us believed that the ideal investment strategy was to keep our money fully invested in the market and to view any dips as buying opportunities.

But if you’re like me, our recent experiences have put that concept into question and make us wonder if we should try to determine whether the future direction of the market is up or down before we decide whether to put money in or retreat to the sidelines.

Here are a couple of ideas on how to do that.

WHAT’S HAPPENING NOW?

Don’t make life complicated. You can probably make your decision simply by looking at price charts of appropriate market indexes.

My favorite place to do that is Yahoo Finance (finance.yahoo.com ). The three major market indexes (Dow Jones, S&P 500 and the Nasdaq) are listed in the Market Summary section on the right.

Follow along with me by clicking on the S&P 500 link, and then select 1 y underneath the small chart on the right to display a one-year price chart of the S&P 500, an index considered representative of the entire market. You have a choice of time spans to display, but a one-year view gives the best perspective for our purposes.

Your goal here is to determine if the market, as represented by the S&P 500,

is trending up, trending down or moving sideways. That’s not difficult.

If the index is higher on the right side of the chart than it is in the middle or the left side, it’s in an uptrend. If it’s lower on the right side, it’s in a downtrend. If it’s directionless, it’s in a consolidation pattern (no trend).

When I looked last week, the right side was pointing sharply down — the S&P 500 was in an unmistakable downtrend.

Here are the rules. The best time to buy is when the appropriate index is in an uptrend. It’s OK to buy when the market is consolidating, but don’t buy when the index is in a downtrend.

If it’s not obvious which way the index is trending, click on the Moving Avg link below the chart to display the 50-day and 200-day moving averages superimposed on the chart. Use the 50-day moving average to measure the short- term strength of the index and the 200-day average for a longer-term perspective.

The index is in an uptrend if it is above the moving average and in a downtrend if it is below the average. The distance between the index and the moving average measures the trend strength.

When I checked, the S&P 500 was well below both moving averages, verifying that it is a strong downtrend.

When you look at the chart, you will see that in late January and early February, the index was above its 50-day moving average but below its 200-day average, indicating it was in a short-term uptrend but a long-term downtrend. That’s called a bear market rally.

The S&P 500 is your best bet if you’re interested in large companies in general, but the Nasdaq composite index is a better guide if you’re considering the tech sector. You can access the Nasdaq chart from the Yahoo Finance home page just as described for the S&P 500.

You can check a variety of other indexes by selecting Indices under Today’s Markets in the Investing section of the Yahoo Finance home page.

While the S&P 500 and Nasdaq are appropriate for large companies, the Russell 2000 is a better gauge for small- or mid-cap companies.

Predicting the Future

Index price charts give you a good perspective on the current market trends,

but they don’t predict future changes in market direction. For that, analysts rely on a number of indicators:

— Market action indicators track statistics, such as the number of stocks hitting new highs compared to new lows each day, the number of stocks moving up in price compared to those moving down, and so forth.

— Economic indicators measure interest rates, inflation rates, employment statistics and the like.

— Fundamental indicators measure stock valuation ratios, dividend yields, etc.

— Sentiment indicators are contrary measures working on the premise that individual investors always get it wrong. It’s a negative if individual investors as a group think the market is heading up and a bullish sign if they think the market is heading down.

— Smart money indicators reflect the actions of market professionals such as specialists and other knowledgeable investors such as company insiders.

Market Gauge (www.marketgauge.com ) displays 35 widely used market indicators in a display that’s easy to interpret.

Select MarketGauge Market Analysis on the home page and then click on MarketGauge Pro. Use of the pro version is free, but you have to register.

Click on Today’s Gauges after you’ve registered and logged in.

Market Gauge displays the indicators in columns labeled Short-Term (one to three weeks), Intermediate (one to three months) and Long-Term (six months) according to its take on how viewers should interpret the indicator values.

Market Gauge displays its interpretation of indicator values with green (bullish), gray (neutral) or red (bearish) blocks. The number of colored blocks (one to five) indicates the magnitude of the reading.

There are many ways to interpret the data, but what works best for me is to observe whether there is a preponderance of red or green indicator values in the short- or intermediate-term columns. Nothing works all the time in the stock market. but I found these signals surprisingly on the mark.

The long-term indicators have been bearish for years. Heeding them would have kept you out of the bull market of the late 1990s.

Market Gauge is a good resource for learning about market timing. You can click on any indicator name to see a tutorial describing the indicator and its application.

The charts (click on Chart) comparing the historical values of each indicator to the appropriate market index (S&P 500 or Nasdaq) are very informative. They also include information showing how Market Gauge thinks you should interpret the indicator values (bullish or bearish).

Paying attention to market timing factors can save you big money in this treacherous market. Yahoo’s index charts and Market Gauge can help you get started.