The correction in stock markets has already started, Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets, told CNBC Wednesday.
Gijsels believes the technical picture looks “plain horrible with nasty divergences over all time frames.”
Gijsels says the fact that volumes have been so high on days when stock prices have fallen indicates that investors are selling the rallies and no longer buying the dips, with volatility moving up from very “complacent levels.”
- Watch the full interview with Philippe Gijsels above.
China will lead to the downside, Gijsels said.
"Just like it bottomed back in March 2009 before the other markets it now topped before the others," he said.
Fears over Greece are the catalyst for this weakness, Gijsels believes.
"Even if the Greek government gets the measures implemented, what will it do to the economy? A multi year deflationary recession/depression looks the most likely outcome,” he said.
Gijsels says everybody seems to be extremely happy about the economic figures and the corporate results.
“They look quite nice. However, to a large extend they are just the flip side of huge government deficits,” he said.
Deflation in parts of Europe and tighter monetary and fiscal policy in China means that money will be less readily available, a factor that will “hurt risky assets,” according to Gijsels.