Data Sources: FRED
This analysis is for reference only and does not constitute investment advice. Investment decisions should be made at your own judgment and responsibility.
Kostolany's egg is a diagram the Hungarian-born investor André Kostolany used to describe how markets cycle. It draws the path from trough to peak and back as an egg-shaped loop, divided into three rising phases and three falling ones. The phases are distinguished by trading volume and by who is participating: near the bottom a small number of experienced investors accumulate quietly, while near the top the crowd piles in amid euphoria. It is not a model that produces price targets; it is a conceptual frame for judging roughly where in the cycle you currently stand.
This page estimates the position from four inputs together: interest rates, unemployment, valuation and investor sentiment. Falling rates, unemployment that has just peaked, low valuations and extreme pessimism point toward the trough; rising rates, unemployment at its low, stretched valuations and widespread optimism point toward the peak. In practice the four rarely tell one clean story, and periods where they point at different phases are common rather than exceptional. Treat the phase shown as a judgement made from the current readings, not as an established fact.
The central limitation is that phases look obvious in hindsight and are almost always ambiguous at the time. Cycles are not of uniform length — some phases pass in months, others run for years — so the model cannot tell you when the next one will arrive. Some of the inputs, unemployment in particular, are confirmed only well after the fact, which delays the reading relative to real time. Use it as a way of thinking about market cycles, not as a signal that dictates when to buy or sell.