Markets

JP Morgan analyst Kolanovic: ‘The worst is over'

Key Points
  • The two-day market sell-offs were likely a technical glitch, says J.P. Morgan analyst Marko Kolanovic.
  • This is probably a good time to buy, Kolanovic says.
  • Volatility may continue for about a week, but the worst is over, he says.
The man who moves markets says expect a volatile week
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The man who moves markets says expect a volatile week

The market's wild roller-coaster ride may have come to an end, J.P. Morgan strategist Marko Kolanovic said.

"We think the worst is over," Kolanovic said of the two-day sell-offs that started during Friday's session. "Some volatility will persist. It's not just going to disappear in one day, but we think this is the time to start getting into the market."

The widely followed analyst pointed out that fundamentals on both the corporate and micro side didn't change that much. Instead, the rapid volatility was "more of a technical market glitch," said Kolanovic, J.P. Morgan's global head of quantitative and derivatives strategy.

"It will have some sort of repercussions for volatility," he said Tuesday on CNBC's "Fast Money." "Meaning, volatility is going to stay a little bit elevated, but we think it's a time to start stepping into the market. Probably an opportunity to buy."

Volatility continued in the stock market on Monday after rising interest rates ignited panic among investors. By the end of day Monday, the S&P 500 had fallen 4.1 percent — the biggest single-day sell-off since August 2011. The Dow Jones industrial average also took a hit, briefly falling below 1,500 points in the afternoon. By the end of trading day the Dow had declined 1,175.21 points to 24,345.75. Both indexes' gains in January were wiped out earlier this week.

But stocks rebounded after opening low Tuesday. By the end of the day, the Dow was 567.02 points higher, closing at 24,912.77. The S&P 500 was also up 2,695.14 points.

The technical glitch likely "overwhelmed electronic market makers," Kolanovic said. While some aftershocks are expected, he said, the biggest punch to the market has likely passed.

"I think these kind of outflows could persist for a week or two," said the analyst. "But we don't think the outflows are strong enough to push the market, further crash the market."