Markets have hit a "full-scale contagion" as fundamentals and technicals influence each other in a "vicious cycle," widely followed market watcher Mohamed El-Erian said Wednesday.
"The big concern is whether bad technicals contaminate the fundamentals even more and then we get into a vicious cycle. Markets are feeding off each other and they're not able to find any firm footing," the Allianz chief economic adviser told CNBC's "Fast Money: Halftime Report."
El-Erian's comments came as the major U.S. averages sold off, partly driven by a continued slide in oil prices. He called the selling "the next stage of a broadening dislocation."
Fundamentals — including a global slowdown and emerging markets weakness — initially drove the selling, he argued. But he said technicals have worsened the issues and caused "massive price overshoots."