Any further market rallies are an opportunity to sell, according to Citi. The S & P 500 has already roared past Citi's year-end target of 4,200. Yet with four months to go in the year and recession timing uncertain, it's too early to start discounting a post-recession recovery right now, said Citi U.S. equity strategist Scott Chronert. "We would say that tactically selling into further strength is justified," he wrote in a note Tuesday. "Further upside to the S & P 500 is certainly a possibility, in our view, as bearish positioning is reversed. However, should this unfold, we think the risk/reward becomes skewed to the downside as 1H23 recession risk means lower earnings and, thus, higher multiples." To be sure, many on Wall Street have called the recent gains a bear market bounce and are cautioning against chasing the rally. The S & P 500, as of Tuesday's close, is up about 17% from its June lows. However, stocks opened lower on Wednesday, with the Dow poised to snap a five-day winning streak. Citi attributes much of the recent rally to short covering. "Our repositioning angle is that short covering can be a step prior to increasing long positions," Chronert wrote. However, he expects valuation headwinds to unfold and is sticking with their base-case expectation for a mild recession in the first half of 2023, and with it, pressure on earnings. Indeed, in a separate note, Citi is still calling a global recession a "clear and present danger," pointing out that economic performance will still likely be affected by high inflation, slowing real GDP growth and a rapidly tightening monetary policy. "Stated bluntly, the global economy is still wrestling with the legacy of the supply shocks that have erupted over the past year. Given these challenges, we fear that the current market rebound may prove to be a disappointing false dawn," Citi's global chief economist Nathan Sheets wrote. —CNBC's Michael Bloom contributed reporting.