Byron Wien: 10 percent correction looms–here’s why

Byron Wien, one of the most respected voices on the market, has a bullish outlook for 2014 but sees the rally taking a serious breather as euphoria turns to disappointment.

"What's going to cause it is that everybody's on one side of the boat here," said Wien, vice chairman at Blackstone Advisory Partners. "Almost everybody's made good money—maybe not 30 percent last year—but everybody was up ... and people are generally feeling pretty positive. There's almost a euphoric mood."

Wien said it won't take much to turn this manic high into a manic low.

(Read more: Why earnings might actually start to mean something)

"When investor sentiment is as positive as this, [the market is] usually vulnerable to any kind of a disappointment," he said. "There could be some earnings disappointment in the fourth quarter. And the geopolitical situation is still, in my mind, pretty unsettled. So you never know what it's going to be. But you do know that when sentiment is euphoric, the market is vulnerable."

Byron Wien
Adam Jeffery | CNBC
Byron Wien

In his list of surprises for 2014, Wien forecast a "Dickensian market with the best of times and the worst of times": specifically, that after a 10 percent correction, the S&P 500 will approach "a 20 percent total return by year-end."

Because he is predicting such a strong second half, Wien is measured in his advice to traders and investors.

(Read more: Scared? This could be the perfect time to get protection)

"I don't know that I'd be short the market, because I'm so bullish for the overall year, I don't want to be that cute," Wien said. "But I do think if the market's going to suffer, it's going to suffer in the early part of the year, and it's going to suffer because sentiment is too one-sided."

—By CNBC's Alex Rosenberg. Follow him on Twitter: @CNBCAlex.

Watch "Futures Now" Tuesdays & Thursdays 1 p.m. ET exclusively on FuturesNow.CNBC.com!

Like us on Facebook! Facebook.com/CNBCFuturesNow.

Follow us on Twitter! @CNBCFuturesNow.

Contact Futures Now

  • Showtimes

    Watch Futures Now Tuesdays & Thursdays 1p ET exclusively on cnbc.com!

Sponsor Links

  • CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.

  • Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.