Saxo Bank: “We Are Putting Out An Early Warning: A Sharp Correction In Equities Could Be Imminent”

By Tyler Durden

Saxo Bank: “We Are Putting Out An Early Warning: A Sharp Correction In Equities Could Be Imminent”

Submitted by Peter Garnry, Head of Equity Strategy, Saxo Bank

Equities are getting frothy with short squeeze and momentum accelerating technology stocks higher. This has led to the highest top five concentration in the S&P 500 eclipsing the dot-com bubble in a sign of destabilisation and increased fragility.

We are putting out an early warning to investors as a sharp correction in equities could be imminent. Our overall longer term view is still positive on equities, but sharp moves up are typically followed by rapid declines. In today’s equity update we also talk about equity valuations and earnings season.

The first two weeks of the year have seen a tremendous acceleration in technology stocks with the sector by far outperforming all other sectors. As we talk about in today’s Market Call podcast we are witnessing an epic short squeeze in Tesla and other heavily shorted stocks. In higher echelons of the market the FANG+ Index is accelerating at an unprecedented pace showing clear signs of frothy behavior. It mimics the move leading …read more

Source:: Zero Hedge

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