JP Morgan's widely-followed market analyst says it's time to buy the dip

J.P. Morgan is telling its clients to make the most of the market's massive sell-off this week as it's almost over.

The bank's widely followed global derivatives analyst Marko Kolanovic, said the dip was largely technical and followed the same selling template as the Dow's massive drop in February.

"Given that equity indices already experienced comparable declines to February (and e.g. Russell 2000 even a bigger drawdown), we think that the current setup favors buying the dip," Kolanovic, J.P. Morgan's global quantitative and derivatives strategy analyst, said in a note to clients Friday. "A risk to the thesis is that market volatility continues to move higher which would result in further outflows from Volatility Targeting funds."

February fears were largely similar to this weeks': Rising yields and the Fed's more hawkish stance. U.S. stock markets struggled to regain footing Friday after a 1,300 drop earlier in the week.

"This risk is now balanced, and can turn into a positive impact, i.e. option hedgers buying equities," Kolanovic said.

Kolanovic is regarded by many as an expert in volatility and derivatives and has gained some notoriety for his timely market calls. Some say the circulation of his note on trading floors as a reason why stocks rolled over during a trading session in July last year.

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