Before latest market plunge, CFRA's Sam Stovall isn't convinced the selling is over

The correction's trail of wounded portfolios could get longer.

Even with Tuesday's market rebound, CFRA chief investment strategist Sam Stovall isn't convinced the selling is over. But when the dust eventually clears, he predicts a comeback will take hold.

"While we could go further lower in terms of this correction, I don't think we're going to be falling into a new bear market," Stovall said Tuesday on CNBC's "Futures Now." "

According to Stovall, economic and market fundamentals are intact. He contends the correction was virtually inevitable because valuations became so expensive and needed to go back to historic norms.

"Like the 'Poseidon Adventure' after the boat rolled over, it does engage its rewriting mechanism," Stovall said. "That's what the markets are going through right now trying to rewrite itself in terms of valuations."

With the S&P 500 down 10 percent from its record high, Stovall estimates it still has 3 percent more to fall before finding the bottom.

"We could head as low as 2,490 on the S&P 500. That would end up being a correction similar to what we experienced from May 21 of 2015 through February 11 of 2016," he said. "It ends of being a very standard correction."

It's a predicament he referenced on the program in early February as the index entered its first plunge into correction territory of a decline of at least 10 percent from recent highs. It followed January's record-breaking performance in the stock market.

Despite the plunge, Stovall predicts stocks could rally more than 7 percent from current levels. His S&P 500 year-end price target is 2,800, and his rolling 12-month estimate is even higher: 3,000. The S&P was at 2,568 and heading down in Wednesday's premarket.

He believes earnings season, which begins next week, has the potential to restore confidence to the markets. Stovall particularly likes energy, financials, materials, small caps and mid caps.

"We think things will be getting better as we move 12 months from now," Stovall said.

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