Prepare for a massive S&P drop: Technician Carter Worth

Carter Worth sticks with bear call
Carter Worth sticks with bear call   

Carter Worth is sticking to his guns.

The chief market technician at Sterne Agee, Worth has long maintained a bearish perspective on the market, even as stocks have soared. And as shares bounced back from their sudden lows in mid-October, Worth repeatedly called for the downdraft to worsen—a prediction that did not pan out.

Friday on CNBC's "Options Action," Worth responded to a Twitter user who insisted that the technician be questioned about his "numerous calls of a retest of 1,820" for the S&P 500.

Worth now says that the September-to-October slide should serve as "a foreshadowing of what the next one's going to look like—which is worse, by all accounts."

"The further this goes without that kind of drawdown, the worse the inevitable drawdown will be," he said. "So we think we're not only going to visit 1,820, we're going to go below that."

With the S&P around 2,110, a fall below 1,820 would represent a 14 percent drop. But Worth maintains that his call should not shock.

"That used to happen all the time in normal markets," Worth said.

A Federal Reserve rate hike could be the impetus for this move, he went on to say. The central bank has kept its target on the key federal funds rate ultralow since December 2008, but could now look to raise rates as soon as June of this year, according to many observers.

"Once the Fed is done, this thing will not be able to stay," Worth predicted. "Once the student can't go to 'extra help' anymore, we're going to see how bad a student he really is."

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