This market reminds me of 1987, strategist Jim Paulsen says

There is a renewal of optimism that will carry the stock market higher, but there may be a correction sometime this year, strategist Jim Paulsen told CNBC on Friday.

In fact, he thinks the 2017 market reminds him of the one in 1987.

Back then, the economy began to recover after two years of a slowdown. There was also an "explosion" in the stock market and bond yields before the market came crashing down in October, the chief investment strategist at Wells Capital Management noted.

Now, in 2017, "we're finally pulling together some things," he told "Power Lunch."

Those things include a return to full employment, the broadening out of the recovery across the globe, the uptick in earnings and normalization of U.S. monetary policy, he explained. Plus, Donald Trump won the presidential election.

"Electing a pro-biz leader is awakening animal spirits," Paulsen said.

However, he's not anticipating a huge crash. Instead, he thinks there may be a correction from higher levels than where the market is today.

Stocks have been rallying since Trump won the election in November. On Friday, the Dow Jones industrial average in midday trading came within 0.37 point of the 20,000 milestone.

Veteran trader Art Cashin thinks hitting the milestone may be a catalyst for the market to move higher.

That's because it will bring the stock market to the attention of a lot more people than are in it now, UBS' director of floor operations at the New York Stock Exchange, said in an interview with "Power Lunch."

"It will start a conversations around the kitchen table about, 'Should we be expanding our 401(k)? How come we're not participating enough?' So it can bring other people in but it depends on how it is played up in the press and elsewhere," said Cashin.

While investors are hopeful about Trump's proposed tax cuts, deregulation and other business-friendly positions, how the administration's new programs actually begin to play out is the "biggest risk" to the market, Cashin said.

"If for example it looks like we're not going to get tax relief, corporate or personal, until the end of the year or maybe later, that's going to disappoint some people. It will change some plans. So right now politics remains front and center."

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