"I think that near-term stock markets around the world are very, very oversold and most oversold since February, March 2009 and 1987," Faber said. "(It) doesn't mean that they can't go lower, but I think they will rebound."

Faber, the editor and publisher of The Gloom Boom & Doom Report hasn't, however, changed his bearish view. He still expects the S&P 500 to drop to 1100 by October, but he says the selloff came even earlier than he had expected.

"The strategists in the US, mostly brainless people, who are predicting S&P between 1400 and 1500 by year end, I think they will have to re-adjust their views and I think the markets may actually go lower," he told CNBC on Tuesday.

Faber says the correction has been so vicious because investors have lost faith in politicians and current economic policies.

"Nobody trusts (anyone) anymore, the Obama administration, the U.S. government, Congress, the people that voted for the debt increase and so on," he said.

The selloff in stocks has boosted safe-havens including Treasurys, driving 10-year yields down to 2.35 percent, despite Standard & Poor's downgrade of the U.S. credit rating. Faber, along with Jim Rogers, believes Treasurys are overvalued and that yieldswill have to rise.

"In my opinion, around this level, government bonds in the US are the short of the century," he added.