You can't really call Thomas Kee, CEO of Stock Traders Daily, an optimist when it comes to equities.
"When the market broke just recently, . . . the uptrend that was established at the beginning of 2013 also broke," he tells
Yahoo. "So we are no longer in that upward sloping channel that began at the beginning of 2013, and that opens the door for further declines."
The S&P 500 index fell 10 percent from its Sept. 19 record high to its Oct. 15 low. Since then it has rebounded 11 percent, hitting a new record high Monday. The index closed at 2,017.81 Monday.
Kee believes the index is ultimately headed for a 66 percent drop, which would put it at 687, not far from the March 2009 low of 667.
The recent recovery "really doesn't change my macroeconomic outlook," he notes. "It doesn't change the demographic risks that exist in our economy." Presumably he's referring to the baby boomers' aging.
The Federal Reserve's easing has "thus far prevented the natural economic conditions that exist from continuing to show their ugly head. Without stimulus, the economy will eventually revert back to its natural condition," Kee adds.
"The economy is naturally much weaker than it is. It's only where it's at because of stimulus. And now without stimulus, the downside risks increase to bring the economy back to its naturalized state."
Some investors are cautious now that the stock market has recovered from its correction.
"We've had this great big run, and people are sitting on their hands and taking a breather to see what happens," Matt Maley, an equity strategist at Miller Tabak, tells
Bloomberg.
"One of the main reasons the stock market got hit in September and October was weakness in both Europe and China. Things aren't suddenly getting better. People still recognize that the U.S. economy is only growing at a slow and steady pace."
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