Good morning, traders…
If you’re struggling to figure out where the bottom of this market correction might be, I’ve got a secret for you…
As a less-experienced trader during past market downturns, I tried to call bottoms by analyzing charts and tracking indicators.
I thought I had cracked the code. But I was wrong.
Whenever I thought, “This has to be the low,” the market would prove me wrong. And if you’ve been feeling that same frustration lately, you’re not alone.
But that frustration led me to a discovery that would change my trading forever: The 11-Step Cycle of Market Emojis.
When trying to determine a bottom, it’s crucial to identify where we are in this cycle. Because even more than technicals and fundamentals, markets move on emotions.
Fear, panic, hope, euphoria — these feelings drive buying and selling far more than logic does.
And if you know what stage we’re in, you can potentially time your trading perfectly while the rest of the market falls victim to these pesky emotional responses.
Right now, it feels like the market is in freefall. But understanding this emotional cycle could give you an undeniable edge.
Not to predict the bottom perfectly, that’s a losing game. But to recognize when the fear is peaking … and when the cycle is primed to curl back to the upside.
The 11-Step Cycle of Market Emojis
I’ve said it before, and I’ll say it again — price action represents the collective emotions of the market participants in that name…
In other words, traders don’t buy and sell stocks based on numbers — they do it based on how they’re feeling.
These dynamics are apparent in all risk assets, from options to crypto and even bonds.
And if you correctly identify the peaks and valleys of trader emotion, you can potentially weaponize those moves to your advantage.
First, look at The 11-Step Cycle of Market Emojis and break down how each stage plays out…
- Optimism – The cycle begins with positive sentiment. Traders are excited about strong earnings, new technologies, or economic growth. Stocks start moving higher.
- Euphoria – The market goes into overdrive. Greed kicks in, traders chase stocks at any price, and everyone believes the rally will never end. Think about how many social media posts say, “Stocks only go up.”
- Complacency – Traders become overconfident. They assume any dip is just a buying opportunity, ignoring warning signs. We saw this in early 2025.
- Anxiety – The first signs of trouble appear. Stocks stop rising as easily. Traders start questioning if the rally is sustainable, but most hold on, assuming it’s just a temporary dip.
- Denial – The market starts breaking down, but traders convince themselves it’s just a normal correction. Instead of cutting losses, they hold on, hoping for a rebound.
- Fear – Losses accelerate, and traders start to panic. Selling pressure increases as reality sets in that this isn’t just a small dip.
- Panic – A full-blown sell-off occurs. Traders rush for the exits, often selling at the worst possible time.
- Anger – Frustration takes over. Traders blame the market, the Fed, Wall Street, or even themselves for their losses. Many quit trading entirely.
- Depression – The lowest point in the cycle. Market sentiment is crushed, and nobody wants to buy stocks. This is where the best opportunities start forming.
- Hope – Some traders start nibbling on stocks, believing the worst is over.
- Relief – The market begins to recover. Those who bought at the bottom start seeing profits, and the cycle resets.
Where We Are in the Cycle Now
After the recent correction, the big question is: Where are we in the cycle?
Right now, we’re likely somewhere between anxiety and fear.
The market has pulled back, traders are nervous, and selling pressure has increased. Others are getting frustrated, blaming external factors like politics, macroeconomics, and market manipulation.
But we haven’t seen full-blown panic … yet.
I’m talking about a circuit breaker/limit-down day on the major indexes, with hundreds of millions of shares in red volume.
A day like that would confirm that anger and depression are right around the corner (and that we’re likely near an enduring bottom).
This part of the cycle is painful, but it’s also one of the most important moments.
It’s where weak hands give up, emotional decisions take over, and real opportunities start to form for disciplined traders.
Bottoming Signals to Watch For
To have true confidence in a bottom forming, we need to feel some relief.
Eventually, relief washes over the market as it begins to recover.
Traders who bought during the depression stage will start seeing profits, birthing a new cycle of FOMO as more join in to capitalize on the upward trend.
This relief reinforces the initial stage of optimism, and the cycle begins anew.
Ask yourself: Does the market feel “relieved” yet?
I think the answer is no, which makes me think the bottom could be further down.
Of course, no prediction metric is perfect. Could the market reverse to the upside tomorrow? Sure.
But this cycle has an uncanny way of repeating itself over and over again — and right now, it’s telling us more stages need to play out before we hit a low.
We’re in a fragile part of the cycle. Fear is rising, emotions are running high, and traders are making rash decisions.
But in every correction, there comes a point where the selling exhausts itself, and opportunities emerge.
The key is recognizing when that moment arrives — and being ready to act aggressively when it does.
Until then:
- Be patient.
- Shorter holding times.
- Smaller position sizes.
- Focus on non-tech names.
Before we go, let’s look at:
💰The Biggest Smart Money Bets of the Day💰
- $4.2 million bullish bet on COIN 03/21/2025 $202.50 calls @ $3.37 avg. (seen on 3/13)
- $2.3 million bullish bet on AMGN 06/20/2025 $350 calls @ $4.72 avg. (seen on 3/13)
- $2.1 million bullish bet on ASHR 04/17/2025 $25 calls @ $2.15 avg. (seen on 3/13)
Happy trading,
Ben Sturgill
P.S. The best traders don’t stop grinding just because it’s the weekend…
And this weekend, you have a great opportunity to learn how my brand-new OMEN system works — before the market opens next week.
Join the great Danny Phee on SATURDAY, March 15 @ 12 p.m. EST for a LIVE OMEN WORKSHOP.
Seats are running out fast — Click here to sign up before it’s too late!
*Past performance does not indicate future results
