Bartels: January Can Still Rally, But …

Chart indicators show that a correction might be around the corner for the S&P 500, Bank of America Merril Lynch Head of Technical and Market Analysis Mary Ann Bartels said Thursday.

"We still think January can rally a little bit more," she said. "As we move into the month of February, we're concerned you can get a 10 to 15 percent correction in February."

On CNBC's "Fast Money," Bartels said that one indicator to watch was the VIX, which she said remained low.

In 2013, she added, the VIX could rise to the 40 level.

Bartels said there was a possibility the stock market's "deep correction" could put it into bear territory, meaning a correction of 20 percent.

"I don't think it's 30 percent. It could be 20 to 25, but I'd be surprised if it was deeper than that because we have very little leverage in this market," she said. "Valuations are not stressed, so I think that that's going to put a floor on the markets."

Trader disclosure: On Jan. 3, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Brian Kelly is long QQQ PUTS; Brian Kelly is long EWG; Brian Kelly is long EWU; Brian Kelly is short EWY; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX; Tim Seymour is long JCP; Steve Grasso is long ASTM; Steve Grasso is long AUO; Steve Grasso is long BA; Steve Grasso is long GDX; Steve Grasso is long LF; Steve Grasso is long LNG; Steve Grasso is long MHY; Steve Grasso is long P; Steve Grasso is long PXD; Steve Grasso is long NVIV; Steve Grasso is long PFE; Steve Grasso is long S; Steve Grasso is funds long HPQ; Steve Grasso is funds long MU; Steve Grasso is funds long NEM; Steve Grasso is funds long KSS; Steve Grasso is funds long ZNGA; Steve Grasso is funds long BODY; Steve Grasso is funds long HOG; Steve Grasso is funds long JPM; Steve Grasso is funds long KKR; Steve Grasso is funds long BWLD.