JP Morgan's widely followed analyst Kolanovic sees market bounce Friday and continuing next week

J.P. Morgan's Marko Kolanovic told clients Friday before the bell that a combination of technical factors should lead to a market bounce during the session and into next week.

"Given the rapid selloff yesterday, the reverting feature of yesterday's option hedging impact should have a positive market impact today," said the bank's global quantitative and derivatives strategy analyst in the note. "The 3% rally in China stocks (FTSE China A50) overnight should improve overall risk sentiment."

Kolanovic has blamed the recent sell-off on so-called systematic strategies like risk parity funds and options hedging rather than fundamental forces. He said a week ago the sell-off was largely over and the S&P 500 is higher since then.

"Next week might see a marginally positive impact and the same for the subsequent October month end rebalance given the significant drop in equities since September," he added in the note Friday.

This is a developing story. Check back for updates.

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