Market Cycle Stages: Why Cycles Turn Before the News Hits the Headlines

Market Cycle Stages: Why Cycles Turn Before the News Hits the Headlines

Most traders believe headlines move markets. But seasoned cycle analysts know better: markets often turn before the headlines explain why. Relying on breaking news to make trading decisions can leave you a step behind. In contrast, understanding market cycle stages offers an edge that puts you ahead of the crowd.

This article explores how different stages of the market cycle play out and why price often moves in response to underlying cycle behavior — long before news outlets catch up.

Understanding Market Cycle Stages

The market moves through four primary stages — accumulation, markup, distribution, and decline. These stages are not arbitrary labels, but reflections of where the market stands in the rhythm of its long-term and intermediate-term cycles. Each stage has distinct characteristics that, when recognized early, allow traders to position with greater confidence and less emotion.

Accumulation

This phase begins when long-term cycles bottom and intermediate cycles start turning higher. It’s a period of stabilization after prolonged weakness. News may still be negative here, but smart money starts entering quietly, preparing for the next leg higher. Prices move slowly and uncertainty is high — yet this is often the best time to begin positioning long.

Investor sentiment is generally pessimistic, and financial media often continues to report bearish developments. This disconnect between perception and cyclical reality is what makes accumulation so valuable — it offers the highest potential for upside with the lowest competition. However, patience is required, as confirmation takes time.

Markup

In the markup phase, the intermediate and long-term cycles align in the same upward direction. Price gains momentum, headlines turn more optimistic, and participation broadens. This is when news begins to “validate” moves that were already underway. But the real cycle turn happened earlier — well before the media caught on.

During this phase, technical strength builds and charts show higher highs and higher lows. Market participants become more confident, and new buyers fuel continued gains. While this is a profitable period, the best risk-reward typically comes at the transition from accumulation to markup, not in the middle of the markup surge.

Distribution

Distribution occurs near a cycle peak, typically when the intermediate cycle begins rolling over while the long-term cycle is still elevated or stalling. Volatility increases, and sentiment may still be euphoric. This is when many retail traders buy in — just as the smart money starts to sell.

You’ll often see a tug-of-war between bulls and bears here, leading to failed breakouts, choppy price action, and rising volume. The media is still optimistic, pointing to economic strength or earnings growth. But behind the scenes, cycles are warning of fatigue.

Recognizing distribution is key to protecting profits and preparing for a possible reversal.

Decline

In the decline phase, the long-term cycle turns down, dragging intermediate cycles with it. This marks the beginning of a broader bearish period. Only then do headlines start focusing on the “reasons” behind falling prices — interest rates, earnings, political risk. But the market was already showing signs of weakness weeks earlier.

This phase typically unfolds faster than the markup. Panic can set in quickly, leading to sharp drops and emotional exits. But for those who recognize the transition from distribution to decline, it offers opportunities to reduce exposure, hedge, or take strategic short positions. Cycle timing is especially valuable here, as waiting for headlines often means entering too late.

Understanding these stages allows you to anticipate the behavior of price — rather than reacting to explanations after the fact.

Check our post on Technical Analysis Time Frame: Why Long-Term Cycles Matter More Than Short-Term Noise for more info.

Today's Market Setup: Intermediate Relief Within a Long-Term Decline

In today’s market, the long-term cycle remains in decline, suggesting a continued weakening in the broader trend. But the intermediate cycle began turning up around March 13, and with that, we've seen a relief rally gain traction.

Importantly, this upturn occurred before the headlines began offering reasons for the bounce. For example, news this morning about potential changes to tariff policy may appear to be the cause of the move — but in reality, the intermediate cycle reversal was already in motion.

Since then, prices have stabilized and moved modestly higher. We’ve seen increased short-covering and a return of speculative interest in certain sectors. However, with the long-term cycle still trending lower, we should view this bounce as a temporary move within a broader downtrend.

This is the essence of Steve’s approach:

• Cycles forecast behavior before the news reflects it.

• Headlines are often just catalysts, not root causes.

• Positioning ahead of the news — with confirmation from long- and intermediate-term cycles — creates a critical edge.

Traders using this approach recognize the current environment as a cycle divergence, where trades may still be viable but require faster exits, smaller position sizes, and tighter stops.

Common Questions About Market Cycle Stages

What are the main market cycle stages?

The four primary stages are accumulation, markup, distribution, and decline. These stages represent the behavioral patterns that develop as market cycles transition. Identifying them helps traders align their strategy with the prevailing conditions instead of reacting emotionally or chasing news-driven volatility.

Do news events cause market moves or follow them?

In most cases, news follows the cycle, not the other way around. When a cycle turn is already underway, news often serves as the catalyst that “explains” the move — after it’s started. Market sentiment shifts with price, and headlines adjust to fit the narrative. This is why cycle-based traders focus on timing, not headlines.

How do intermediate and long-term cycles interact?

The intermediate cycle (4–6 weeks) captures shorter-term moves, while the long-term cycle (3–6 months or more) reflects the overall trend. When both cycles rise together, rallies are more likely to extend. When they diverge, as we see today, traders need to be more selective and manage risk more closely.

Can traders profit during cycle divergence?

Yes, but with caution. For example, if the long-term cycle is falling but the intermediate cycle is rising, a relief rally is likely — but it may lack follow-through. These situations call for tighter stops, quick profit-taking, and smaller exposure. Recognizing divergence also helps avoid false breakout traps.

Why is cycle analysis better than trading headlines?

Headlines can be misleading, reactionary, and driven by emotion. Cycle analysis provides a data-backed, forward-looking framework that positions traders ahead of reactive market behavior. It helps remove bias, improves timing, and creates consistency in strategy.

Resolution to the Problem

Most traders react to the market. They wait for a headline or a breakout to tell them what’s happening — and by then, they’re often too late. This reactive behavior leads to missed opportunities, poor entries, and unnecessary risk.

By understanding the stages of the market cycle and monitoring both intermediate and long-term cycles, traders can:

• Anticipate turning points before the news breaks.

• Enter positions with stronger confidence.

• Avoid false narratives and emotional trades.

• Respond strategically to divergences.

• Manage downside with clarity instead of panic.

The key is letting the cycles guide you — not the headlines.

Join Market Turning Points

If you want to master cycle timing and trade with clarity, Market Turning Points provides the tools to help traders stay ahead of the crowd. Our real-time analysis is built around long- and intermediate-term cycles that give traders a decisive edge.

Visit Market Turning Points today and enhance your trading strategy.

Conclusion

The market doesn’t wait for headlines. It moves when cycles turn — and the headlines simply follow. By recognizing the stages of the market cycle, you gain the ability to act when others are still searching for reasons. Cycles lead. News reacts. That’s the edge.

Author, Steve Swanson