The Market Party is (Almost) Over: Brickell Analytics CEO Isaac Gilinski Explains the Grand Super Cycle in Elliot Wave Theory
For All of Those Riding The Wave, You may Want to find a way off.
A Grand-Supercycle wave is the longest period in the growth of a financial market and comprised of five distinct Super-cycle waves that can each last for several decades. Analysis of data available in the Bloomberg charts reveals that the duration of the DOW’s Grand Super-cycle wave ① up is 123 years, and the duration of the SPX’s Grand-Supercycle wave ① up is 92 years.
A Closer Look at the Grand Super Cycle
Isaac Gilinski, is the owner of Miami-based Brickell Analytics which provides customized macro-based research on global markets. He claims that looking closer at each of the DOW’s three impulsive waves since its inception in 1896, we can see that they last for a proportional and symmetrical duration. Specifically, the first impulsive wave lasted 33 years from 1896 to 1929. The second impulsive wave lasted 34 years from 1932 to 1966. The third impulsive wave is currently in its 37th year and started in 1982. We can see from these numbers that the average duration is 34 years, which means that the current Supercycle has lasted the longest.
Interestingly — and not by coincidence — the upward swings of Supercycle waves (which as noted occur within the larger Grand-Supercycle wave) have mirrored expansions of the American economy since the end of the 19th century. Comments Brickell Analytics’ Isaac Gilinski: “Supercycle wave (1) up from 1896 to 1929 was driven by the rapid growth of the shift from an agriculture-based economy to an industrialized one. Supercycle wave (3) up from 1932–1966 was driven by the post-World War Two boom and reconstruction of Europe. Supercycle wave (5) up from 1982 to the present began with two terms of “Reagonomics,” and has since continued with the rise of the knowledge economy, information age, online retailing and digital transformation.
However, all good things must come to an end — at least temporarily — and that is why everyone, from ordinary folks whose financial profile consists of their 401(k) plan, to seasoned investors whose trading desk has so many monitors that it rivals NASA Mission Control — should be aware of the fact that even as the economy ostensibly seems to be buzzing along, statistics imply that Grand Supercycle wave (1) up is on life support, and it won’t be long before Last Rites are delivered.
According to Isaac Gilinski, once Supercycle wave (5) is complete — and based on a historical analysis of average Supercycle wave durations, this should be happening very soon — we will shift into Grand Supercycle wave ② down. In practical terms, this means a pronounced bear market that will surpass the downturn that emerged in 2008 and is likely to be the largest decline since the Great Depression. For people who are prepared and protected, there will be significant opportunities. For people who are unprepared and exposed, they could find decades of prudent and intelligent wealth building wiped out in a matter of months, weeks — or even days.
The views, thoughts, and opinions in this article belong solely to the author, and do not necessarily reflect those of Isaac Gilinski or Brickell Analytics. Furthermore, the prediction made by Brickell Analytics was one of many predictions made by Brickell Analytics; not all predictions are accurate. Brickell Analytics does not provide any personalized investment advice, nor does it engage in trading of securities. This article should not be considered investment advice or an offer to sell or the solicitation of an offer to buy any securities. All profits are for illustrative purposes and are not a suggestion that similar or future profits may occur. Past results are not necessarily indicative of future results. All investments involve risk and potential loss of principal. It should not be assumed that future investors will experience returns comparable to those of the research discussed herein.