Economist Harry Dent, who has been skeptical on the multi-year bull market, said the current rally—deemed by many as the “Trump rally”—should extend even further.
“This rally is real. It was a technical breakout—what I call a ‘fifth wave’ or a ‘blow off rally,’ Dent told the FOX Business Network.
Dent, who believes there is currently a bubble, sees the market reaching a top around July 2017, with the Dow hitting 22,000, possibly rising even more. The economist said come mid-year, that bubble could start to burst.
“What happens if that is a fifth wave kind of peak like this that I’ve been looking for, for a long time, the first wave down in most bubble bursts in history—the first move down is 40-45% in two and a half to three months,” he said.
Though Dent notes that many have confidence in President-elect Trump’s ability to turn around the economy and promote growth, he still isn’t buying into the idea.
“I don’t believe that past the point, but that is what the market thinks and so we’re heading up for the first half of this year," he said. "I think there’s a high chance that we’ll finally see bonds diverge and yields go down and stocks go down.”