Art Hogan: Vertigo driving down markets, not data

What is driving markets lower?
What is driving markets lower?   

Despite the latest economic data coming in mixed, vertigo tied to recent levels is the main reason markets were slumping on March's third day of trading, Art Hogan said.

"One of the underpinnings of the recovery has been auto sales, and the disappointment caught people on their heels, until we remembered the Northeast had one of the worst winters in a decade," Wunderlich Securities' chief market strategist told CNBC's "Squawk on the Street" on Wednesday. "We're getting a little mixed data here, but I don't think that's what's driving markets lower ... I think what's driving markets lower is a pure case of vertigo at new highs."

Markets were lower Wednesday morning, with the Dow Jones industrial average dropping nearly 100 points, or 0.55 percent, while the S&P 500 shed 0.54 percent. The Nasdaq also retreated two days after closing above 5,000 points for the first time in 15 years.

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Hogan added that, even though the dollar was at multiyear highs, it will be beneficial for U.S. stocks. "Very much like low energy prices, we price in the worst-case scenario [when we think about a stronger dollar]," he said. "I think there's more benefits than detriments to a stronger dollar in an economy that exports 13 percent of its GDP."

He also said this trend of a stronger dollar will continue. "We're the only central bank that's thinking of tightening right now, while the rest of the world is in an easing mode," Hogan said.

The dollar index traded at 95.96, up 0.60 percent on Wednesday morning.