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Authored by Adam Taggart via PeakProsperity.com,

Steen Jakobsen, Chief Investment Officer and Chief Economist of Saxo Bank, is sounding a clear warning of an arriving market correction.

Over-inflated asset prices, over-crowded trades, anemic market liquidity, and a continued decline in the credit impulse set the table for a banquet of consequences, in Steen's view.

Confident a market correction of at least 15% lies ahead, Jakobsen urges investors to exit leveraged positions and build cash.

As for a longer view, he predicts commodities will be one of the best asset classes to own over the next five to ten years:

Every single product available to investors today at has less liquidity than is perceived. I think one of the biggest gaps between perception and reality right now is the ability to actually exit the portfolio you're in. Whether that's an ETF, whether that's credit, or whether that's even some of the small cap stocks.

We already have a proof of this because the spike in February. Think about it: it was just a 5% move in terms of price, but it created almost a 10,000% increase in volatility. If a 5% move creates that sort of noise in the system, it shows that we're playing musical chairs. And when the music stops we're not missing one chair, but we're going to be missing three chairs in a ten-chair race.

It's pretty clear that the liquidity side is a concern. This afternoon a un-named Central Bank called me up and wanted to talk about liquidity in ETFs and the bigger risk of the market itself.

If you look at the breadth of the stock market over the last couple of weeks, it's very, very, very narrow. So we're all chasing the same investments, we're chasing the same themes. We're assume everything is benign when we talk about risk.

But I'm very concerned. My quantitative model supports this caution; it's saying we really have to be in the mode of capital preservation now. This is the time for capital preservation.

Click the play button below to listen to Chris' interview with Steen Jakobsen (45m:44s).