The GOP victory could expand expansion but make the recession worse

Minerd predicts a recession and a "bad" bear market in 2020. From the highs he sees a sell-off of 40 to 50 percent.

"Extensions do not die in old age, they die because the central bank brings them outside the woodshed and kills them," he said Wednesday.

With the drop in unemployment and rising price pressures, the Federal Reserve has no choice but to raise interest rates further. It is expected that the Fed will raise interest rates once again in 2018 and three times in 2019.

By 2020, the tax increase from the country's capital will have a negative impact, Minerd said.

"They will have the confluence of higher interest rates and a burden coming from Washington's fiscal policy, and that's the formula for a recession," he said.

However, the market has recently undergone a seasonal standard adjustment and should increase by about 15 percent from here until next May or June.

He said long-term investors should now reduce their exposure to equities, while traders can buy and quit stocks before seasonal pressures increase in the second half of the year.