Rich Ross, technical analyst at Evercore ISI, is getting bearish on the whole market, but not too bearish, predicting a pullback of 3 percent on the S&P 500 and 5 percent on the NASDAQ-100.

The call is based partly on complacency, partly on the time of year, and partly on what he sees are disturbing trends in other asset classes:

“While global equity trends remain strong and prices near record highs; volatility is at the lows; the put/call hit its lowest level of the year; and crude, the dollar, yields and inflation expectations continue to collapse as we enter a period of thinner trade, heightened volatility and typically weaker equity returns,” wrote the analyst.

What’s most shocking in his new report is the analysis about the sector Ross believes will lead the downturn.

The analyst notes an eerie similarity between trading on the main Philadelphia Semiconductor Sector index (known as “the SOX”) and Bitcoin, and indeed the charts do show a remarkable similarity this year, rising modestly from mid-January to mid-March, and taking off in mid-April.

“I reiterate my sell call on Semi’s and continue to see a test of 1,000 on the SOX (-8 percent) as the group continues to display the textbook signs of a reversal in trend and a technical symmetry with Bitcoin, which is down -9% overnight and poised for another -17% to 2,044,” Ross wrote.

SOX index (black line) vs. Bitcoin (bar chart)

Source: Evercore ISI

He’s not completely negative on the whole market. He has an aggressive call to buy biotech and sell semiconductors against them.

Source: Tech CNBC
Chart analyst sees a troubling similarity between the rise of chip stocks and bitcoin