The S&P 500 could be set for another sharp decline as the bullish technical indicators have all but disappeared and the trend is heading lower, Edward Loef, technical analyst from Theodoor Gilissen Bankiers, told CNBC.
“Change is a way of living in the financial markets and we should respect the trend – now the trend is reversing to the downside,” Loef said. “From a technical perspective we are heading again down to the lows of last year.”
"I think you should stay defensive again or buy some protection because another decline seems around the corner," he added.
Loef had been bullish on stocks over recent months, but is now changing his outlook to bearish.
European stocks are unlikely to fare much better and could also face severe declines, according to Loef.
Loef also expects a return to extremely high levels of volatility, following Wednesday’s near 14-percent jump in CBOE volatility index. “Here we go again,” he said.
(Watch the full interview with Edward Loef above).
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