MMT

Market Psychology

Always-on research page: classic market-cycle / sentiment diagram families and Stovall / Way2Wealth–inspired market-stage frameworks rebuilt as high-fidelity MRT SVGs. Use them as mental models next to Fear & Greed and Education — not as forecasts or composite weights.

Four Stages of the Market Cycle

Accumulation → Markup → Distribution → Decline, with classic cycle emotions along the price path.

ACCUMULATIONMARKUPDISTRIBUTIONDECLINEPRICETIME →DisbeliefHopeOptimismBeliefThrillEuphoriaComplacencyAnxietyDenialPanicAnger

Concept inspired by classic four-stage market-cycle education charts; rebuilt for MRT (not a copy of the original artwork).

Psychology of a Market Cycle

Emotion path along a market cycle — disbelief through euphoria, panic, depression, and the next sucker's-rally disbelief.

PRICETIME →DisbeliefThis rally will fail like the others.HopeA recovery is possible.OptimismThis rally is real.BeliefTime to get fully invested.ThrillBuy more on margin — tell everyone!EuphoriaI'm a genius! We're all getting rich!ComplacencyJust need to cool off for the next rally.AnxietyMargin calls — this dip is lasting…DenialGreat companies bounce back.PanicEveryone is selling — get out!Capitulation100% out — can't lose more.AngerWho shorted this? Why allow it?!DepressionRetirement is gone. I am an idiot.DisbeliefThis is a sucker's rally.SIMPLIFIED CYCLEContr.Recov.Expans.Prosp.Peak = max financial riskTrough = max opportunity

Concept inspired by “Wall St. Cheat Sheet”–style psychology-of-a-cycle education charts; rebuilt for MRT (not a copy of any publisher artwork).

Bull Market Phases

Discovery (Accumulation / Trend Emergence) → Momentum (sentiment extreme, shake-out, renewed optimism, bear-trap) → Blow-off (FOMO, Euphoria).

Market Cycles — Bull MarketDiscoveryMomentumBlow-offAccumulationSmart money buying.Trend EmergenceHigher highs, higher lows.Momentum buildingBroader participation — trend becomes known.First Sentiment ExtremeOptimism reaches moderate extreme.Shake-outWeak hands sell.Renewed OptimismBuyers warm up again.Bear-trapOvervaluation fears — premature end-of-cycle.FOMO"Everyone is long except me!"EuphoriaIt's different this time.

Concept inspired by DailyFX / IG bull-market cycle education charts; rebuilt for MRT (not a copy of the original artwork).

Main Stages in a Bubble

Stealth (Smart Money) → Awareness (Institutional) → Mania (Public) → Blow-off, with sloping mean valuation dashed.

VALUATIONTIME →Smart MoneyStealth PhaseInstitutional investorsAwareness PhasePublicMania PhaseBlow-off PhaseMeanTake offFirst Sell offBear trapMedia attentionEnthusiasmGreedDelusion"New Paradigm"!!!DenialBull trapReturn to "normal"FearCapitulationDespairReturn to mean

Concept inspired by Jean-Paul Rodrigue “Main Stages in a Bubble”; rebuilt for MRT (not a copy of the original artwork).

Tech Hype Cycle

Investor optimism over time — Present Reality vs Future Promise. Stage 3 (Peak Future / Enthusiasm→Euphoria) is circled.

HighInvestor OptimismLowPresent RealityFuture PromiseTechnological TriggerMaximum Divergence"This time is different"Exogenous Negative Catalyst1.Future Heavily DiscountedRelative to the PresentDisillusioned EquilibriumSelling persists on negativesentiment about current headwindsthat everyone is aware of.2.Cycle Begins: A Positive EventDrives More OptimismRecognition of ChangeEarly recognition of the discrepancybetween TTM/NTM multiples leadsinvestors to begin focusing on thefuture. Most don't believe it untilthe rally has proven legs.3.Peak Future: Present Heavily DiscountedRelative to FutureEnthusiasm → Euphoria2–5 year forward multiples; cyclical/macrothreats ignored. Quality differentiationbreaks down; correlation within the themeapproaches 1. Sell-side raises targets;capital flows become self-reinforcing.4.Re-evaluation: Reality Sets InExpectations ResetConcerns about the present begin outweighingfuture promise. Estimates move lower and arefollowed by multiples — often overshooting.

Concept inspired by Citrini Research / @Citrini7 Tech Hype Cycle; rebuilt for MRT (not a copy of the original artwork). Stage 3 circled as the educational emphasis.

Signs of Excessiveness and Extremism

MRT excessiveness sentiment curve + checklist (13 top + 13 bottom); wording adapted from FLAME University education materials.

ExcessSentimentExtremeMean / equilibriumTop excessBottom excessCYCLE →

Top Signs

13
  1. Large no. of IPOs
  2. Rapidly Rising Prices
  3. Excess Leverage
  4. Availability of Credit
  5. Over-optimistic Front Covers of Newspapers & Magazines
  6. Very High Trading Volumes
  7. Historically High P/E & EV/EBITDA Multiples
  8. Art & Luxury Markets Booming
  9. Financial Press and Financial TV become Favourites
  10. "This Time is Different" Declared
  11. Amateur Investors move to Equity Asset Class
  12. Innovation Leads to Euphoria
  13. Social Proof Leads to Herding

Bottom Signs

13
  1. No Mergers and Acquisitions
  2. No IPOs
  3. No new money for Venture Capital
  4. Low Price/Sales & EV/EBITDA Multiples
  5. Many Companies Trading below Book Value
  6. Very Low P/E Multiple
  7. Central Banks eased for 6 to 12 Months
  8. Recession Declared Officially, News is Stale
  9. Previously Favourite Sectors are Hated
  10. Credit only available to High Quality Borrowers
  11. Investors are Cautious and Out of the Market
  12. Negative Front Covers of Newspapers and Magazines
  13. Negative and Depressed Consumer Sentiment

Checklist wording adapted from FLAME University “Signs of Excessiveness and Extremism”; MRT-owned panel UI and excessiveness sentiment curve (not a copy of the FLAME slide artwork).

Market Cycle Leads the Economic Cycle

Investors price expected conditions — the market cycle typically turns months before GDP and industrial production confirm. Live stage readout: /market-stage.

LEVELTIME →Market cycle (leads)Economic cycle (lags)Market peakPrices discount the turn firstEconomy peakGDP / IP confirm laterLead ≈ 6–9 monthsMarket anticipates the economyMarket troughAccumulation begins

Concept inspired by Sam Stovall / Way2Wealth sector-rotation education frameworks (market cycle leads the economic cycle); rebuilt for MRT (not a copy of any publisher chart).

Economic Stage Macro Signatures

Four economic stages and the textbook state of consumer expectations, industrial production, interest rates, and the yield curve — conditions markets tend to discount early.

Full RecessionCONSUMER EXP.RevivingIND. PRODUCTIONBottoming outINTEREST RATESFallingYIELD CURVENormalEarly RecoveryCONSUMER EXP.RisingIND. PRODUCTIONRisingINTEREST RATESBottoming outYIELD CURVENormal (steep)Full RecoveryCONSUMER EXP.DecliningIND. PRODUCTIONFlatINTEREST RATESRising rapidlyYIELD CURVEFlatteningEarly RecessionCONSUMER EXP.Falling sharplyIND. PRODUCTIONFallingINTEREST RATESPeakingYIELD CURVEFlat / inverted

Concept inspired by Sam Stovall / Way2Wealth sector-rotation education frameworks (four-stage macro signatures); rebuilt for MRT (not a copy of any publisher chart).

Sector Leadership by Market Stage

Five market-cycle stages with historically associated leader and laggard sectors. Education only — live classification lives on /market-stage.

Market Bottomecon phase: Full Recession↑ Leaders XLF XLK XLY↓ Laggards XLE XLPRates have fallen, credit is loosening, and the market anticipatesrecovery before the data confirms it. Interest-sensitive cyclicals beginaccumulating first.Early Recoveryecon phase: Early Recovery↑ Leaders XLK XLI XLB↓ Laggards XLU XLVIndustrial production turns up and capex resumes; capital goods plusraw-materials demand lead. Defensives lag as risk appetite broadens.Market Topecon phase: Full Recovery↑ Leaders XLB XLE XLP↓ Laggards XLK XLYThe economy runs hot, inflation and rates climb, and the late-cycleinflation trade leads while early-cycle growth starts to roll over.Bear Marketecon phase: Early Recession↑ Leaders XLE XLP XLV↓ Laggards XLF XLY XLIDemand falls and earnings estimates get cut. Defensives with inelasticdemand and still-elevated Energy hold up while cyclicals sell off.Late Bearecon phase: Recession → Recovery transition↑ Leaders XLV XLU XLF↓ Laggards XLK XLBThe deepest part of the downturn. Rate-sensitive defensives lead, andFinancials begin to base in anticipation of the next easing cycle.

Concept inspired by Sam Stovall / Way2Wealth sector-rotation education frameworks; rebuilt for MRT using the dashboard’s stage→sector map (not a copy of any publisher chart).

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