Market Cycles

After a long decline, sentiment is exhausted and headlines are negative. Smart money quietly builds positions. Volume is low, price drifts sideways. Most retail investors have already given up.

Price breaks out of the accumulation range. Each pullback is bought. Sentiment shifts from disbelief to cautious optimism. New participants arrive. This is usually the longest, most rewarding phase.

Volatility rises, rallies fail to make new highs, and headlines turn euphoric. Smart money sells into strength while retail piles in. Price chops sideways or grinds up on weakening breadth.

Support breaks. Selling begets selling. Each rally fails. Sentiment swings from denial to fear to capitulation. The cycle ends where it began — back in accumulation, with the next narrative already forming.

Cycle phases are obvious in hindsight and hard to call live. Watch breadth, volume, and how the market reacts to news. A market that ignores good news is often late-cycle; one that ignores bad news is often early.