An indication that the tech selloff among US equities being only partly finished came from last month’s scenario when the Morgan Stanley warned about the top-heavy market seeming prescient was issued.

Following September 2 high, Nasdaq 100 declined 13%, resulting in lesser than its 50-day average, and the S&P 500 seen mainly over a year. Further losses may take place as the selloff still has to clear out the positive sentiment that arose in the past few months at the time of its historic rally, suggests bank chief US equity strategist Mike Wilson.

Risk in decline to 200-day average comes from the tech-heavy gauge, strategist report suggests. That level, close to 9,528, would imply a 12% drop from existing levels and a 23% drop from its all-time high of 12,421 achieved earlier this month. Mike Wilson discussed the result of stocks ending up so extensive, and chances of larger rectifications by maintaining an uptrend.

The Nasdaq 100 went to a three-week rout, dropping about 2.4% as of 1:40 p.m. in New York. Friday observed the most massive ETF tracking of the index has a decline in money, being the quickest rate since 2000. Meanwhile, while large speculators boosted the net bearish positions in Nasdaq futures to a 12-year high.

Wilson states that the bullishness with tech stocks has yet to be entirely washed out. Even with the worst observed drawdown over months, bullishness continued elevating among tech giants like Apple Inc. and Facebook Inc. As observed in trading debuts such as Snowflake Inc; there was a soar in trades, more than doubling on the first day.

He discussed hedge funds remaining incredibly long in tech and growth stocks, citing the firm’s prime brokerage data.

The conviction partly reflects the outsize returns from internet and software companies but highlights the danger if sentiment begins to sour. Even after this month’s retreat, Nasdaq 100 is up 24% for the year, compared with a gain of less than 1% for the S&P 500.

Wilson wrote that a lot of the funds “are letting it ride.” He added that that might factor into play and give some fuel for the correction to proceed a little further than what is mostly predicted.