Wall Street Cheat Sheet: The Psychology of a Market Cycle, as an Illustration

The Wall Street cheat sheet is a single chart that circulates among traders: one price wave, rising then collapsing, labeled with the emotion investors are supposed to feel at each point, from disbelief and hope at the bottom to euphoria at the top, then denial, panic, capitulation and depression on the way down. It is an illustration of how sentiment can swing, not a measured cycle: no data set produced its shape, and real markets do not follow its timing. This page gives its stages, what is known about where it comes from, and how three real declines compare with it.

The stages of the Wall Street cheat sheet

The labels differ from one copy to the next. A common version runs through these phases, as retold by PriceActionNinja:

Other copies split these phases further. An Interactive Investor article by Jonathan Hobbs of Finimize, published on September 6, 2024, says the cheat sheet "lists 13 emotions that investors go through during the boom and bust of a stock market cycle" and names them in order: disbelief, hope, optimism, belief, thrill, euphoria, complacency, anxiety, denial, panic, capitulation, anger and depression. Those are the labels of the diagram at the top. The order of feelings is the stable part; the exact words change from copy to copy, and the article credits the image to "Wall Street Cheat Sheet, TradingView" without naming an author.

Who made the Wall Street cheat sheet?

We could not find the original author or a first publication date. Copies credit a website or none at all, and none of the attributions we found could be confirmed, so we do not credit anyone. A documented chart with a similar shape exists: Jean-Paul Rodrigue's Stages in a Bubble, in The Geography of Transport Systems, divides a bubble into four phases (stealth, awareness, mania and blow-off) and is placed by its author in the public domain, free to use with citation. It describes asset bubbles in general, again as a model, not as a measurement.

The two charts tell the same story from different sides. The cheat sheet follows what an investor feels; Rodrigue's stages follow who is buying. In his text, those who understand the new fundamentals buy quietly during the stealth phase, many more investors notice the momentum during awareness, the public piles in during the mania while the smart money and many institutional investors are selling, and after a trigger a phase of denial gives way to a fast fall in the blow-off. Late buyers, "commonly the general public," are left holding the falling assets. His phase of denial is the moment the cheat sheet labels "denial", after the first fall from the top.

Real declines compared with the chart

The chart draws one smooth wave. Real declines vary in depth and length. On Bitcoin weekly closes from August 2017 to October 2026, three falls from a record weekly close exceeded 50%:

The lows were the weeks of December 10, 2018 (3,229), November 14, 2022 (16,280) and June 22, 2026 (59,577), the lowest weekly close so far for the third decline. The first two declines took 155 and 121 weeks from the high to a new weekly close above it; the third had not recovered by the week of October 19, 2026, the last bar of the series, at 80,154. One more fall passed 50% without starting from a record: from the week of August 5, 2019 (11,550) to the week of March 9, 2020 (5,361), −53.6%, a high still below the 2017 record, so it is not counted above. Three cases are far too few to measure a cycle, and they are not meant to: they show that the depth and the duration change every time, which the cheat sheet's single wave cannot tell you.

How to use it

As a mirror, not a map. The chart is a reminder that a feeling about a position, confidence or fear, is not information about where the price goes next. Rules decided before the trade (a stop, a position size) do more against those feelings than any reading of the chart. Sentiment gauges built from data are covered on fear and greed, the theory of market cycles on market cycles, and the temptation to buy a collapse on catching a falling knife.

Reading a single stock's recent run as if it followed the cheat sheet has the same problem: no data says which stage a run is in.

More definitions are in trading concepts.