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Three reasons Ralph Acampora is worried about 2014

Acampora: Why 2014 could be rough year

Ralph Acampora is not looking forward to next year. While Altaira's director of technical analysis is bullish into the end of 2013, he fears that a year-end rally could set stocks up for a painful 2014.

"2014 is a year that we should have some sort of a decline," Acampora said on Tuesday's "Futures Now."

Acampora, often known as the godfather of technical analysis, then went on to enumerate the three reasons that next year makes him so nervous.

Reason one: The market will be overextended

Acampora believes that stocks will have a sweet end to 2013, with the Dow Jones industrial average closing out the year "somewhere between 16,500 and 17,000"—or 7 to 10 percent higher than where the index is trading today.

But once the market gets to that level, buyers might suddenly make themselves scare.

"Assuming I'm right, and we get a little bit of a correction here and then we go higher and it's across the board—all-time highs in the Russell averages and the , and the Dow catches up and everybody's euphoric—if that happens and we go into the new year, 2014, then we're going to be facing extended price charts," Acampora said. "The market will be very overbought."

(Read more: Cashin: Tech valuations remind me of dot-com bubble)

Ralph Acampora
Source: Ralph Acampora | Twitter

Reason two: Fundamentals will come back to the fore

Once the market reaches the technician's bullish year-end target, "the fundamentals will come back into play," Acampora said.

Fundamentals haven't exactly ruled the day in 2013. The S&P 500's trailing price-earnings ratio has risen from 14 at the beginning of the year to 16.4 currently, which means that investors have been paying a higher and higher multiple for corporate earnings.

But as those investors stare at a market that starts to look "overbought," Acampora believes they may change their tune—which could present a serious risk if the market's fundamentals don't improve.

(Read more: Get ready for the DC-based earnings excuses)

Reason three: Tapering could come sooner than everyone thinks

Acampora notes that even under Janet Yellen, the Federal Reserve might taper its quantitative easing program earlier than many expect.

"Everybody likes the idea that she is a dove," Acampora said. But when it comes to the Fed's asset-purchasing program, "maybe it's not going to be out to infinity. Maybe it'll be the first quarter, or first half of next year, when she starts to pull in a little bit and you start to see tapering."

The technician says that this tapering could be "a third element" of why stocks will drop in 2014, cementing his bearish case for the year.

"I don't think [the decline] will be as big as everybody's talking about," Acampora is careful to note. "But it's out there."

—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.

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