Market Psychology

A mechanical version of the cycle: price above or below its six-month average, and rising or falling. On 22 made-up months it reads optimism from the 6th month (130), anxiety for one month at 132, panic from the 10th month (129) all the way down, hope for one month at 85, and optimism again from 88. The eleven-phase chart collapses to four, and the in-between phases last a single month — which is why they are so hard to spot live.

• The popular cycle chart is an illustration, not a finding; no study fixes the phases, their order or their length.
• Real cycles skip phases, repeat them, and stall for years. Labelling the present is far harder than labelling the past.
• Survey-based sentiment does carry some information about returns (Baker & Wurgler 2007), but as a tilt, not as a clock.

close = pd.Series([100, 104, 109, 115, 123, 130, 133, 134, 132, 129, 124, 116,
                   106, 96, 88, 84, 83, 85, 88, 93, 99, 106])   # 22 months, made up
trend = close.rolling(6).mean()
rising = close.diff() > 0
phase = np.select([(close > trend) & rising, (close > trend) & ~rising,
                   (close <= trend) & ~rising, (close <= trend) & rising],
                  ['optimism-euphoria', 'anxiety-denial', 'panic-capitulation', 'hope-relief'], '')
starts = [(i, ph) for i, ph in enumerate(phase) if ph and phase[i - 1] != ph]   # month each phase begins

Assumes import numpy as np and import pandas as pd. Each snippet carries its own example numbers; the comments say which are made up.