(Bloomberg) -- If the US stock market goes down a little from here, it “could go down a lot.” 

That’s the view of Goldman Sachs Group Inc. tactical specialist Scott Rubner, who warned in a note to clients on Thursday that the “pain trade is now lower, not higher from here.”

Rubner’s note came the day after the S&P 500 Index suffered its worst decline in months, amid worries around Big Tech earnings and as Federal Reserve Chair Jerome Powell signaled that an interest-rate cut is unlikely next month. Enthusiasm around megacap tech firms helped propel the market to record highs earlier this week. The benchmark index clawed back some of the previous day’s losses Thursday.

“We have all-time high problems for the US equity market and the bar is simply too high in February,” Rubner wrote, pointing to elevated leverage levels, stretched positioning in futures and a drop in liquidity.

Rubner’s call Thursday followed one last week when he flagged turning tactically bearish. His analysis also showed a seasonal trend in equity performance — the second half of February is typically the worst two-week period of the year for US equities.

In early November, Rubner correctly called for a strong year-end rally and said “the pain trade is to the upside.”

The S&P 500 gained about 14% in the final two months of the year and is up roughly 2% in 2024.

--With assistance from Michael Msika.

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