CMT Market Cycles Flashcards
6 cards from real CMT practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CMT Market Cycles flashcards as text
According to Dow Theory, which phase of a bull market is characterized by broad public participation and rising prices across all sectors?
Answer: Public participation phase
The public participation phase is the second stage of a Dow Theory bull market, where the majority of investors recognize the uptrend and actively buy, driving prices broadly higher.
Elliott Wave Theory posits that market prices move in a pattern of how many waves in the direction of the main trend?
Answer: 5
Elliott Wave Theory identifies five impulse waves in the direction of the main trend (waves 1, 2, 3, 4, 5) followed by three corrective waves (A, B, C).
In Dow Theory, a 'secondary reaction' in a bull market is best described as:
Answer: A short-term correction of one-third to two-thirds of the prior primary move
A secondary reaction in Dow Theory is an intermediate counter-trend move that typically retraces one-third to two-thirds of the prior primary trend move.
The Kondratieff Wave (K-Wave) cycle is associated with an approximate period of:
Answer: 50–60 years
The Kondratieff Wave is a long-term economic cycle of approximately 50 to 60 years, identified by Russian economist Nikolai Kondratieff based on capitalist economies.
The presidential election cycle theory suggests that US equity markets tend to perform best during which year of the four-year presidential cycle?
Answer: Third year (pre-election)
The presidential cycle theory holds that the third year (pre-election year) typically produces the strongest equity returns as incumbents enact stimulative policies ahead of the election.
In Elliott Wave Theory, corrective waves are labeled with:
Answer: Letters A, B, C
Elliott Wave Theory labels the three-wave corrective sequence with letters A, B, and C to distinguish them from the five numbered impulse waves.