Morgan Stanley's Michael Wilson believes the stock market is entering a destructive phase.

"The Nasdaq could correct by 15 percent plus, the probably goes down about 10 [percent]," the firm's chief U.S. equity strategist said Thursday.

His comments came on CNBC's "Trading Nation," where he was speaking publicly on Monday's correction warning research note for the first time. Wilson contends financial conditions are tightening more than most investors appreciate, and a correction has already started.

"The market has just been getting narrower and narrower. So what we've seen is every sector within the S&P has gone through about a 20 percent correction on valuation except for two: technology and consumer discretionary — basically growth stocks," Wilson said. "Our view is that this rolling bear market has to complete itself by hitting those two sectors, and we think that's actually begun."

Wilson, who was one of last year's biggest bulls, sees this shift from growth to value stocks creating a lot of trouble because technology and consumer discretionary groups make up nearly half the S&P.

"If the growth stocks get hit disproportionately hard, it's going to be very difficult for that money to leak into other parts of the market without having some loss of value," he said.

Wilson's S&P year-end target is 2,750 — 4 percent below the index's record high of 2,872 hit on Jan. 26 and about 3 percent from current levels.

As for next year, he doesn't see the situation getting much better.

"There are definitely a lot of signs already that there's a view that things are going to slow materially next year whether there is a recession or not," Wilson said. "

However, he isn't bailing on stocks altogether. Wilson likes energy, utilities, industrials and financials as a rotation from growth to value picks up steam.