Market researcher James Bianco warns April's big run will collapse.
His reason: Investors are too bullish.
"I understand the market has been up a lot since the March low. But what I see in the market is a retracement rally that looks very similar to the first type of rallies that you get in protracted bear markets," the Bianco Research president told CNBC's "Trading Nation" on Wednesday.
Bianco warned last month the coronavirus turmoil would be worse than the financial crisis. In early March, he put all his money in cash and never looked back — despite the bounce.
So far this month, the S&P 500 is up almost 14%. If the trend holds, it'll be the index's best showing since 1974. Meanwhile, the Dow is up more than 12% in the same period and is on track for its best monthly performance since January 1987.
"We'll revisit the 2,200 S&P low, if not make a lower low — probably by late summer," he said. "That's going to come because we're going to find out now is a critical time for the market."
Bianco predicts there will be an overwhelming realization that life isn't getting back to normal when then economy starts to reopen.
"What the market seems to be thinking is we're going to restart, and we're all going to pretend that it's 2019," said Bianco. "And, we're all going to stand on the subway platform with 500 other people waiting for the next train."
He contends a recovery will still be long and slow — despite the Federal Reserve's aggressive policies to support the economy and financial system.
"We are moving to a lower growth environment, and I think the market is a little ahead of itself right now in what that means," Bianco said. "There's going to be more changes and more evolution that the economy is going to have to go through before we're ready to start a full on bull market."