Wilson expects the earnings season will start on Friday. This may jolt the markets, according to him. He thinks investors will be surprised by how sharply earnings will have to adjust, leading to a major sell-off in stocks.

"That's another area investors are being a little bit complacent. Costs are increasing faster than net revenues," Wilson said. The expert assumes that quarterly results will likely kick off a 2023 reset on Wall Street. "The full-year estimate has got to come down," he added. "Negative operating leverage is really starting to flow through to the income statement from the balance sheet," he added.

In addition, investors are likely to face another blow with the Federal Reserve's next interest rate decision, which will be announced on February 1. The economist expects that the Fed will not reassure investors by signaling plans for a reversal. "Our call is predicated mostly on earnings and the fact that the Fed probably isn't going to be as reactive to a slowdown as they have been historically," Wilson said. Most recently, Atlanta Federal Reserve President Rafael Bostic said the December jobs report, with its slowdown in wage growth and higher-than-expected job growth, did not change his views on monetary policy, which would remain hawkish for quite some time.

Wilson's S&P 500 year-end price target is $3,900, which is second lowest on the Street. In just six trading days this year, the index is up 2%. The index has already corrected 12% since the October 13 low. Judging by forecasts, it is unlikely to stay that way for long.

Another major player, the chief executive of JPMorgan Chase & Co, also said in a recent interview that a Federal Reserve rate hike should go beyond what is currently expected.

"There's a 50 percent chance current expectations are correct in assuming the Fed will boost its benchmark rate to about 5 percent, and a 50 percent chance that the central bank will have to go to 6 percent," the JPMorgan Chase & Co. executive said in an interview. "I'm on the side that it may not be enough," Dimon said. "We were a little slow getting going. It caught up. I don't think there's any harm done by waiting three or six months," he added.

As for the S&P 500 index, the price may continue to rise. It is necessary to protect the level of $3,920, which will be the priority for today. Only after that the price may soar to $3,961. It is likely that the uptrend may be limited by the level of $3,983. If the index declines and we see weak activity at $3,920, bulls will have to protect $3,866. Reaching below this level, the trading instrument may plummet to $3,839 and $3,806.