There may be a break in the selling as the year winds down but a "dreadful bear market" is in the cards for 2019, according to hedge-fund veteran Mark Yusko.
He told CNBC on Friday he expects the markets to end the year down, in the single digits, and in January there will be a "hope rally."
"Then I think we start down," he said on "Fast Money." "Next year is going to be a dreadful bear market, and a bear market is a market that goes down most days but goes up a lot on good news or perceived good news."
That means there will be a lot of "spiky" rallies throughout the year.
"It's like a rubber ball bouncing down a set of stairs. Each bounce is higher, that's just kinetic energy. The end of the trip is a bad place," said Yusko, founder, CEO and chief investment officer of Morgan Creek Capital. The firm is a privately owned investment advisor that provides services to institutional clients as well as pension plans, endowments, foundations and family offices.
Stocks are now on the verge of a bear market. On Friday, stocks plunged, with the Dow Jones Industrial Average having its worst week since the 2008 financial crisis. The fell 2.1 percent to close at 2,416.58, and the Nasdaq entered bear market territory, ending the day 2.99 percent down at 6,332.99.
Yusko, who predicted the rout in October, has been calling for a continued sell-off for some time. He thinks it will last until 2020.
He's certainly not alone in his bearish call. DoubleLine Capital founder Jeffrey Gundlach told CNBC earlier this week that the S&P is headed to new lows.
"I'm pretty sure this is a bear market," Gundlach told Scott Wapner on CNBC's "Fast Money: Halftime Report" on Monday.
However, Fundstrat's Tom Lee doesn't think the bull market is over.
"It's just a transition year. We've been calling it, sort of, a midlife. The bull market is reaching its midlife," he told CNBC on Monday.
While he's convinced of a bear market, Yusko still sees pockets of opportunity. He would look to protect against the risks — going long on certain names and short on others. For example, Apple, which he thinks is attractive compared to other big-name tech stocks, could be a good long, while he could short Amazon or Netflix.
He also likes master limited partnerships, or MLPs, because they pay investors 8 percent to wait.