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Larsson: Technically, we are in an equity bubble
We are in a bubble, but it's going to be a while before it bursts. That’s according to Kim Cramer Larsson, Saxo Bank’s Technical Analyst. Kim says it’s not on the same scale as we’ve seen in the 1920s or during the dot com crash as it’s not that big, but clearly it’s a similar scenario. Despite occasional pull backs, global equity markets have consistently reached new, record highs in recent months. His charts point to tell-tale signs that something has to give soon. However, he still believes there’s some way to go before we see a significant fall. The Dow Jones Industrial Average may well return another twenty per cent before we see a significant pull back.
Kim says a bubble usually consists of one or two “pre-peaks” which are major corrections before the “blow out top” and they can be pinpointed in famous crashes throughout history; we may have already passed a “pre-peak” today. However, we could be as far as a year away from the ultimate peak. And if and when we reach that level, the fall will not be on the same scale as previous crashes.
02:18 minutes
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