He told Reuters that he thinks stocks still look "overbought." Stocks fell to a session low following Gundlach's comment, with the Dow Jones Industrial Average down more than 600 points.

DoubleLine Capital CEO Jeffrey Gundlach believes that U.S. equities did not have a "panic low" and that even with the most recent sell-off are still too expensive, according to a Reuters report. The money manager also said investors should avoid investment-grade corporate bonds and focus on preserving their capital.

Gundlach said that corporate bonds are more dangerous now because "triple-B" credit — the rating for debt securities just above "junk" status — has skyrocketed since 2008, from 20 percent of all investment grade credit to approximately 50 percent today, according to Reuters.

Gundlach's DoubleLine Capital manages more than $120 billion. The investor is sometimes referred to as the "Bond King," but his firm manages equities as well, and he often comments on the stock market.

Early on in the October sell-off, Gundlach said a plunge in global equities would soon spread to U.S. stocks, which it did.

This is a developing story. Check back for updates.