"I don't think it'll be QE next time, I think it'll be something else. Negative rates, some sort of targeted fiscal stimulus by the Fed," Pal said.
Secondly, Pal said, it's time to short developed markets such the U.S., Europe and Japan.
"Developed markets like the U.S., Europe and Japan are going to play catch-up to the downside," he said. "If the U.S. economy continues to weaken, it's easy to see the S&P at 1,600" this quarter.
The short trade involves waiting out a correction in the markets today and then shorting that correction, all under the assumption that things will only get worse from here.
He said that early in the year, many traders jump in with large short positions and then get washed out by February and March.
"And usually at that time, it's the time to reset the positions properly, and then they should trend longer," Pal said. "Wait for a correction and short the correction — rather than shorting weakness."
The iShares Emerging Market ETF, the EEM, has fallen more than 33 percent since its high in April. Pal said a similar fall will spread to the developed economies.