Investor David Tice is going deeper into bear territory, predicting that the economy is months away from a deep correction that will send stocks down by as much as 50 percent.

Tice is known for his tenure as manager of the Prudent Bear Fund. He sold the fund, which depends on market pullbacks for profits, to Federated Investors just as the financial crisis was unfolding in 2008.

Since the acquisition, he's been involved in private equity, film producing and charities. But he's planning his emergence from hibernation to capitalize on the potential downturn.

"The market has tended to go down about every seven years. It went down in 1987, 1994, 2001 and 2008," Tice told CNBC's "Trading Nation" on Friday. "During these periods after the declines, it rallies like crazy. But now bad things are about to happen again."

He sold his bear fund when it had $1.2 billion in assets under management. According to Morningstar, it has just $254.7 million right now under Federated's leadership. CNBC reached out to Federated for a comment.

The steep losses could just be a stark reminder of the nature of the stock market rebound. The Index rebounded 92 percent since the financial crisis hit in September 2008.

"The catalyst is we're 93 months into an economic recovery. We have the [Federal Reserve] starting to tighten. We have banks actually starting to tighten," he said. Tice pointed out the economy is not doing very well, with the gross domestic product growing by an anemic 0.7 percent in the first quarter.