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Brace for ‘more choppiness’: Strategist

Tuesday, 10 Sep 2013 | 3:28 PM ET
Trading the new Dow
Tuesday, 10 Sep 2013 | 12:00 PM ET
Goldman Sachs, Nike, and Visa are joining the Dow and causing the biggest shakeup for the industrial average in 9 years. CNBC's Dominic Chu explains how the additions and subtractions will perform. And Liz Sonders, Charles Schwab, discusses the Dow's impact on the retail sector.

Don't expect stock market volatility to ease up anytime soon, Charles Schwab & Co. Chief Investment Strategist Liz Ann Sonders said Tuesday.

"I got a little bit cautious in the beginning of August, not that we try to time every little wiggle in the market, but mostly due to technical conditions having deteriorated, the market had gotten overbought," she said. "Most of the short-term sentiment measures had suggested a level of froth that I think put on the table a bit of a pullback. We got 4.6 percent. We had a couple of days of rally. I would like to see the sentiment conditions pull back even more. We didn't see that."

On CNBC's "Fast Money," Sonders said that such market conditions could have some swings ahead.

"It suggests to me we could have more choppiness," she said. "We have the obvious issues of seasonality on top of which we have the Fed meeting, although I think much of the weakness associated with tapering is already in the market."

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Sonders added that Syria was "the big short-term wild card" and noted that still ahead were the federal debt-ceiling debate in Washington, the second round of sequestration and the implementation of the Affordable Care Act.

"So, not trying to be too cute tactically, but in the near term, you may still want to keep your cards close to the vest," she said. "But I certainly wouldn't fold them."

Sonders said that she didn't expect that secular challenges for emerging markets would go away anytime soon.

(Read more: Carl Icahn slams Dell board after dropping fight)

"Everything from debt levels to current account deficits, credit growth, inflation problems that put central banks in a very different position than a lot of the developed world, suggests we may have a problem," she said. "You're going to get fierce, fierce rallies. We always remind people that in a secular bull market, you can still have some unbelievably fierce cyclical downturns.

"And even if we're in a secular bear market, you can have some really, really fierce, cyclical bull markets. You have to be fairly nimble if you're more trading-oriented. And again, we just think what's happening in the emerging markets may be more short-term in nature, certainly possibly playable for the more trading-oriented but maybe not long-lasting."

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

— CNBC's Katie Young contributed research to this report. Follow her on Twitter: @katiecnbc.

Trader disclosure: On Sept. 10, 2013, the following stocks and commodities mentioned or intended to be mentioned on CNBC's "Fast Money" were owned by the "Fast Money" traders: Stephen Weiss is long BAC; Stephen Weiss is long C; Stephen Weiss is long FB; Stephen Weiss is long M; Stephen Weiss is long TGT; Michael Murphy is long BAC; Michael Murphy is long AAPL; Michael Murphy is long C; Michael Murphy is long PFE; Jon Najarian is long AAPL; Jon Najarian is long JPM; Jon Najarian is long FB; Jon Najarian is long EBAY; Jon Najarian is long MU; Jon Najarian is long CIEN; Jon Najarian is long GRPN; Jon Najarian is long GPOR; Jon Najarian is long COP; Jon Najarian is long NUAN; Jon Najarian is long RKUS; Joe Terranova is long AAPL; Joe Terranova is long COP; Joe Terranova is long CIEN; Joe Terranova is long CERN; Joe Terranova is long RKUS; Joe Terranova is long SYK; Joe Terranova is long TMO; Joe Terranova is long OPK; Joe Terranova is long MOS; Joe Terranova is long MAR; Joe Terranova is long SVU; Steve Milunovich is long DELL; Steve Milunovich is long EMC; Steve Milunovich is long HPQ; Steve Milunovich is long FIO; Steve Milunovich is long IBM ; Steve Milunovich is long CTSH; Steve Milunovich is long AAPL.

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