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Fast Money

Stock market correction is déjà vu all over again: Technician

More pain ahead for S&P 500

Mark Twain once said history doesn't repeat, but it often rhymes.

According to one technician, that appears to be the case with U.S. stocks, which are in the midst of a volatile stretch that looks eerily reminiscent of the 2011 selloff.

Oppenheimer's Ari Wald said the current bull market correction—defined by a decline of at least 10 percent in an index from its most recent high—looks an awful lot like the one investors saw four years ago.

"Seasonally both markets peaked in May, they both had this waterfall-like decline in August when seasonals weakened," Wald said this week on CNBC's "Fast Money."

In 2011, the remained range-bound for two months and undercut its low before rebounding higher in October. By Wald's chart work, if U.S. stocks follow the same playbook they did in 2011, we could soon see the S&P 500 Index test the 1,867 low.

"The S&P 500 needs more than a few days to stabilize from an eight-month breakdown in trend," he said.

In such a volatile market, Wald said traders should be eyeing opportunities for mean reversion—in this case, when sectors eventually move back to their mean or average.

"One area that stands out is consumer discretionary," Wald said. He recommended investors buy this sector on any weakness.

"Here's what keeps us up at night, we're most concerned about the energy sector," Wald added.

That's because the credit market within energy continues to widen, threatening the market. Additionally, the energy sector has broken a 15-year uptrend. Wald recommended selling energy as a hedge.

In short, the long-term cycle is intact, but Wald anticipates more volatility in the near-term.