Understanding Market Cycles: Fight the Madness, Focus on the Light
June 24, 2025
Introduction: The Madness Isn’t New—It’s the Pattern
Civilisations rise. Civilisations fall. Always have. The edges fray before the centre caves in. Rage overtakes reason. Disagreement calcifies into tribal war cries. Then, eventually, everyone looks around and pretends they didn’t see it coming.
Same with markets. Booms don’t end with graceful declines—they lurch, they scream, they collapse under their own euphoric weight. Busts don’t whisper their arrival. They gut the room.
This isn’t an anomaly. It’s a blueprint.
You’ve seen this before. Hell, if you’ve traded long enough, you’ve felt it in your nervous system. The crowd is dancing while you feel queasy. The panic when you feel calm. It’s not intuition—it’s pattern recognition.
We’ve said it before: if you want to understand where this all goes, dust off The Decline and Fall of the Roman Empire. Gibbon’s chronicling isn’t just history—it’s prophecy. He wrote about decadence, distraction, and moral fatigue. Sounds familiar.
We’ve quoted a few eerie lines in our Random Musings section, but here’s the real point: cycles don’t repeat exactly, but they rhyme. Loudly. In finance, in culture, in power structures. Every empire, company, and ideology lives on borrowed time. The expiration date is in the fine print—usually ignored until it’s too late.
Cycles Within Cycles: The Rhythm Behind the Chaos
Some market cycles are fast and noisy, driven by tweets, crowd panic, and algo bursts. Others stretch for decades, silently shifting the tectonic plates underneath everything we thought was stable.
But zoom out far enough and you’ll notice a strange consistency. The market sells off on bad news, sure—but often just after running up irrationally. Meme stocks implode—after they double three times. Currencies decay after decades of strategic misalignment and denial. Nations stumble after rotting quietly from within.
All of it follows the same rhythm: build, peak, rot, collapse, reset.
If you’re looking for clean entry points and textbook signals, you’ll always be late. But if you start thinking in terms of tension—when it builds, when it peaks, when it exhausts—you start to feel the rhythm. It doesn’t mean you’ll time every top or bottom, but you’ll stop getting emotionally whiplashed by the daily tape.
Stop Reacting. Start Sensing.
Most traders blow up not because of bad setups, but because of emotional whiplash. They react to every red candle like it’s the apocalypse. They chase every breakout like it’s salvation.
But when you start thinking in nonlinear, vectoral terms, the chaos settles. You stop needing confirmation. You stop demanding certainty. You begin to observe instead of cling.
That’s the shift. That’s where the edge is.
From a cyclical lens, everything breaks eventually. And that’s okay. Markets reset. Cultures renew. Boom and bust aren’t opposites—they’re twins. One prepares the ground for the other.
Even at the hourly chart level, the same emotional script plays out: overconfidence → fatigue → doubt → panic → rebirth. On a five-minute chart, on a five-decade timeline—same psychology, just different scale.
And once you grasp that, you don’t flinch when the wave comes. You position for it.
Why Rage and Nostalgia Are Traps
Yes—values are eroding. You can feel it. Leadership is decaying. Corruption’s not hiding anymore. The culture is accelerating, fragmenting, and turning in on itself.
But here’s the uncomfortable truth: your anger won’t change the cycle. Your nostalgia won’t reverse it either.
Getting emotionally locked into “what should be” is how most people get steamrolled by “what is.”
Rage is seductive. It gives you something to do. So does longing for a past that’s gone. But neither one helps you position.
You want to win? Step out of the emotional battleground. Get into observation mode. Watch the flows. Read the cycles—study tension and release, not headlines and hashtags.
This is how you move from being a passenger to being a participant—with a plan.
How to Hold Steady While Others Break
The market’s job isn’t to make you rich. It’s to reveal who you are under pressure.
Most investors seem rational—until the tide turns. In a bull market, everyone looks composed. But throw them into a real drawdown, and the mask slips. Panic sets in. Excuses pile up. Blame gets tossed like confetti. What looked like discipline was just comfort in disguise.
But if you understand the deeper pulse—if you know what phase you’re in—you stop playing defence.
You hold when others dump.
You accumulate when others puke.
You go quiet when others scream.
You don’t need a prediction. You need positioning. You need a posture that can survive drawdowns and capitalise on mispricing.
It’s not about timing the exact bottom. It’s about having the clarity and discipline to step in when it feels wrong but looks right.
The Trap of Linear Thinking
Linear thinkers get smoked in a cyclical world. They think in straight lines—“If X happened last time, Y must happen next.” But cycles loop. They evolve. They throw off false signals, shakeouts, and delayed feedback.
We saw this during the meme-stock mania. People assumed a new paradigm. No fundamentals, just vibes. And for a while, it worked. Until it didn’t. Then came the tears, the lessons, and the pivot back to reality.
Or take inflation. People forgot that monetary policy lags. That energy shocks create ripple effects. That sovereign debt has consequences. So they reacted late, or worse, wrong.
Thinking in cycles doesn’t mean you predict the top. It means you recognise when the euphoria smells stale, when the fear gets too thick. When the odds tilt, not because of a headline, but because of behavioural exhaustion.
Every Collapse Has Its Seeds in the Boom
Here’s the cruel joke of every cycle: The worst damage is done during the euphoria phase. The panic reveals it.
When everyone’s high-fiving in the metaverse and trading NFTs on leverage—that’s not progress. That’s the warning.
The collapse doesn’t come from nowhere. It’s planted during the boom, watered by denial, and harvested during the bust. But only those watching the soil see it coming.
So don’t wait for the news to tell you what phase we’re in. Look at how people feel. How do they behave? How they talk. That’s your leading indicator.
This Is the Cycle: Accept It, Exploit It
This isn’t about doom. It’s about discipline. The cycle isn’t your enemy. It’s your map.
And like any good map, it doesn’t promise outcomes—it shows terrain. Peaks. Valleys. Traps. Turning points.
You can’t stop the recession, the rot, or the reset. But you can move with it. You can bet against the crowd’s timing. You can buy value when everyone’s chasing hype. You can lean in when others unplug.
You can hold steady while others break.
Final Word: Find Your Stillness
Understanding market cycles doesn’t require a PhD. It requires presence. The ability to feel when the noise is getting too loud. When the crowd is leaning too far. When fear is baked in, and opportunity is quietly reloading.
Cycles are natural. The question is—will you flinch every time it turns, or will you learn to ride the curve?
Because in the end, the market doesn’t reward emotion. It rewards posture. Adaptability. Stillness in chaos.
The storm isn’t the enemy. Your reaction to it is.
