Manias, Panics, and Crashes: How to Spot Market TopsS&P 500 IndexTVC:SPXHenriqueCentieiroIn 1637 in Amsterdam, tulip bulbs sold for the price of houses. Fast forward to 2021, GameStop rockets from $20 to $483 in three weeks — people are mortgaging their homes to buy more shares. Different eras, different assets, same predictable pattern. The Nasdaq-100 surged 148% in 2020-2021, only to crash 37% in 2022. Bitcoin hit $120,000 in 2025 before plummeting 50% to $60,000. Palantir ran from under $10 to nearly $200, then dropped 35%. Why does this financial madness keep repeating? And more importantly, can we identify and quantify the pattern? After reading Charles Kindleberger's 1978 book "Manias, Panics, and Crashes: A History of Financial Crises" and studying Hyman Minsky's work on financial instability, I built an indicator that identifies manias, panics, and crashes — before they wreck your portfolio. In this educational TradingView post, I'll show you the pattern that repeats throughout 300+ years of market history, and how to use this indicator to protect yourself. The 5 Stages That ALWAYS Repeat Kindleberger analyzed 300+ years of bubbles and discovered they all follow the same cycle: Stage 1: Displacement Something changes: new technology (railways, internet, AI), low interest rates, banks lending freely. Stage 2: Boom Prices rise. Early investors make money, word spreads, more people pile in. Credit expands dramatically. Stage 3: Euphoria Markets get irrational. Even taxi drivers give stock tips. Your uncle mortgages his house to buy crypto. Leverage is everywhere. Stage 4: Profit-Taking Insiders and smart money start selling. The public doesn't notice yet. Stage 5: Panic and Crash Something triggers fear, or the Fed raises rates to fight inflation. All that cheap credit becomes unpayable. Panic selling ensues. Here's the critical insight: All manias are fueled by credit expansion. Otherwise, where would speculators get the money? Minsky's Three Phases: How Stability Breeds Instability Hyman Minsky's Financial Instability Hypothesis explains WHY this happens: "Stability is destabilizing."After a crash, everyone is conservative. Banks only lend to borrowers who can pay both interest and principal (Hedge Finance). Then time passes. The economy does well. Risk appetite increases. Banks start lending to people who can only pay interest, not principal. Borrowers must constantly refinance, but "that's fine as long as prices keep going up" (Speculative Finance). Finally, we reach peak madness. Banks lend to people betting entirely on asset prices rising so they can sell for a profit (Ponzi Finance). Sound familiar? Pre-2008: No-income mortgages on $500K houses 2021: Borrowing to buy meme stocks 2020-2026: The Japanese carry trade Then cheap credit ends. The Fed raises rates. All those loans become too expensive. Everyone realizes they've been swimming naked. This is the "Minsky Moment" — when euphoria becomes terror. The Manias, Panics, and Crashes Indicator Here's what hit me: This is not random. It's predictable. Stability → credit expansion → leverage → higher prices → euphoria → fundamentals ignored → Minsky Moment → crash. You can see it forming in real-time. But most people are blinded. That's when I built the indicator. How the Indicator Works The indicator tracks signals that historically appear during manias and panics: Mania Signals: Extreme deviation from long-term trends (prices accelerating fast) Parabolic price acceleration (the "everyone's piling in" phase) Volume explosions (FOMO in action) Volatility spikes (wild swings = euphoria) Panic Signals: Sharp reversals from highs Volume spikes on down moves (everyone rushing for the exit) Key support breakdowns Cascading liquidations The indicator highlights heated areas as "manias," "panics," and "crashes." What You See on the Chart S&P 500 (2021-2022): The indicator showed a clear mania phase in early 2021, followed by a panic during the 2022 decline. Bitcoin (2025): The indicator triggered a mania alert when BTC hit its all-time high around $120,000. Bitcoin then crashed to $60,000, losing 50% of its value. Palantir: As PLTR ran from under $10 to close to $200, the indicator gave a mania alert. The stock subsequently dropped over 35% to the $130 area. The Pattern: A panic or crash is almost always preceded by a mania. Important: "Mania" doesn't mean "sell this second." It means: "Risk is elevated. Don't add leverage here. Be prepared." The indicator gives you three key insights: When we're in dangerous mania territory → Be cautious. Reduce leverage. Take some profits. When we're in extreme panic territory → Be opportunistic. This is when fear creates buying opportunities. The cycle never stops → Stability breeds complacency, complacency breeds risk-taking, risk-taking breeds instability. Once you understand the pattern, you can profit from it. You don't need to predict the exact top or bottom. You just need to recognize when we're in dangerous territory versus when we're in opportunity territory. Warren Buffett said it best: "Be fearful when others are greedy, and greedy when others are fearful." My indicator just quantifies that wisdom. Most investors will read this, nod along, and do nothing. The signs are always there. You just need to pay attention. The cycle repeats. The only question is: will you recognize it this time? Check the Manias, Panics and Crashes indicator and let me know your thoughts. - Henrique Centieiro