◐ Behavioral
◆ The PatternMarkets cycle through emotional phases: Disbelief → Hope → Optimism → Euphoria (buy here at maximum risk) → Anxiety → Denial → Panic → Capitulation (sell here at maximum opportunity) → Depression → Relief → back to Hope.
The market sentiment cycle — the emotional journey investors collectively experience through a full market cycle.
The phases:
Bottoming: Disbelief → Hope → Relief
Rising: Optimism → Excitement → Thrill
Topping: Euphoria ← Maximum financial risk
Falling: Anxiety → Denial → Fear → Panic
Bottoming: Capitulation ← Maximum financial opportunity → Depression
Bottoming: Disbelief → Hope → Relief
Rising: Optimism → Excitement → Thrill
Topping: Euphoria ← Maximum financial risk
Falling: Anxiety → Denial → Fear → Panic
Bottoming: Capitulation ← Maximum financial opportunity → Depression
Maximum risk arrives at the point of maximum emotional comfort. Maximum opportunity arrives at maximum discomfort.
Pattern bridge: The emotional arc from optimism to euphoria to panic to hope is a distribution cycle. In ML, cyclic learning rates deliberately walk through this arc.