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Bull market begins after taper: Pro

A September tapering of Federal Reserve asset purchases will rein in the stock rally before it powers ahead at the beginning of 2014, Citigroup Chief U.S. Equity Strategist Tobias Levkovich said Tuesday.

"Let's put it this way, you have two choices. You can get worse economic data, and you get tapering not happening. QE stays in place. Or, the alternative is you get decent economic data … tapering comes in. QE goes away," he said. "I'd rather have the latter than the former for the markets."

On CNBC's "Fast Money," Levkovich said that his 2013 year-end targets for the S&P 500 and the Dow Jones Industrial Average remained set at 1,615 and 15,300, respectively.

Initiated in September, those targets appeared lofty, he added.

"We were the bulls," he said. "And now people are chasing the tape, and I think that's a silly way to go through markets."

Levkovich said that he was positive on stocks.

"I'm very bullish. I can see 1,825 by mid-June next year," he said. "What I don't see is high probability in the next three months."

Levkovich's mid-2014 targets were 1,825 for the S&P and 17,033 for the Dow.

Citi was "overweight" financials, energy, real estate and utilities, he added, also noting that consumer stocks were pricey.

"Valuations are very high on a number of the consumer discretionary areas," Levkovich said.

By CNBC's Bruno J. Navarro. Follow him on Twitter @Bruno_J_Navarro.

Trader disclosure: On July 30, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Joe Terranova is long GS; Joe Terranova is long MS; Joe Terranova is long VRTS; Joe Terranova is long OXY; Joe Terranova is long TRV; Joe Terranova is long EMC; Joe Terranova is long SJM; Joe Terranova is long TRIP; Stephen Weiss is long AAMRQ; Stephen Weiss is long AIG; Stephen Weiss is long BAC; Stephen Weiss is long C; Stephen Weiss is long MOS; Stephen Weiss is short POT; Stephen Weiss is long LCC; Pete Najarian is long AAPL; Pete Najarian is long BAC; Pete Najarian is long C; Pete Najarian is long AMZN; Pete Najarian is long NFLX; Pete Najarian is long FB ; Pete Najarian is long BBRY; Michael Murphy is long BAC; Michael Murphy is long SNE.

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