Wall Street
© Bloomberg
In what may be the bearish call to end all bearish calls, one technician believes 2014 will be the year of "major reversals," with the Dow Jones Industrial Average expected to start a two-year decline that could eventually take it down more than 70% to below 5000.

United-ICAP chief market technician Walter Zimmerman said the Dow Industrials could still rally another 4% or so first, to a high around 17150, before the great reversal begins. And for those who thought 2008 was the worst bear market they will ever see, just wait.

"Based on our longer-term time cycles the present stock market rally must be considered the bubble to end all bubbles," Mr. Zimmerman wrote in a note to clients.

He doesn't believe the Dow Industrials will hit a long-term cycle low until 2016, somewhere in the 5770 to 4650 range. The Dow hasn't seen those levels, which are 65% to 72% below current prices, since late-1995 to mid-1996.

Dow Jones Chart
© Fact Set
Mr. Zimmerman said the S&P 500 and Nasdaq Composite "should all peak as one" with the Dow Industrials this year, with the S&P 500 potentially rising to 1925 and the Nasdaq to 4540 first, before peaking. He sees the S&P 500 eventually bottoming as low as 450, and the Nasdaq at 1000, in 2016, or 75% and 76%, respectively, below current levels.

The reversals Mr. Zimmerman is expecting aren't just in stocks. He believes gold will launch a recovery that takes prices up to $1,631 an ounce. He also believes the 10-year Treasury yield will correct lower and the U.S. dollar will reverse higher at the same time.

What will it take to prove Mr. Zimmerman wrong? He said a "decisive monthly close above 17150.25″ for the Dow in 2014, and above 1924 for the S&P 500 and 4537 for the Nasdaq, would be needed to derail the bearish scenarios.

Tomi Kilgore writes about the stock market, with an emphasis on technical analysys, out of the Wall Street Journal's New York bureau. His topics includes broad market, sector, individual stock and intermarket movements.