The market has lost its leaders. Expect more pain: BofA

Stocks are swimming in a sea of red.

The S&P 500, Nasdaq and Dow all fell deeper into correction territory as a heap of volatility had investors hitting the panic button. With the S&P hovering just above two-year lows, one technician warns the worst is yet to come.

On CNBC's "Futures Now" Thursday, Bank of America Merrill Lynch's Stephen Suttmeier said that the loss of leadership in mega cap stocks will take a dismal toll on the broad market.

"Looking at the markets, we've seen this loss of leadership from what have really been the generals," he said. Suttmeier, of course, was referring to the recent deterioration of the high-flying technology and consumer discretionary stocks. "When I look at some of those names I see that they are starting to crack."

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Names such as Starbucks, Nike and Home Depot, which were among the best-performing stocks in the consumer discretionary sector in 2015, have fallen a respective 8, 10 and 14 percent year-to-date. Meanwhile, the once seemingly unstoppable FANG stocks — Facebook, Amazon, Netflix, Alphabet — have dropped 2, 25, 24 and 8 percent respectively, wiping out nearly $150 billion in market cap in the last six weeks.

"I think that when you get the bigger cap stocks starting to roll over and follow what's been happening in the small caps, it will start to have a greater impact on the market," he added. The Russell 2000 has been steadily trading in a bear market, down more than 26 percent from its June 2015 high. "That could carry the S&P 500 as low as 1,600." That's nearly 13 percent lower than where the large cap index is currently trading and 25 percent from its May 2015 high.

Furthermore, Suttmeier said that the weakness in equities will continue to give gold a boost. The precious metal has already rallied 17 percent year-to-date but the BofA technical analyst said it could surge another $300.

"We're not ruling out $1,350 to $1,375 maybe even $1,550 on gold," he said. "I don't think that bodes well for equities."

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