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Use Coming Pullback as Buying Opportunity: Strategists

While stocks may see a pullback in the next few weeks, investors should use the opportunity to buy because markets are ultimately positioned to rally next year, according to Ryan Detrick at Schaeffer's Investment Research and Chris Hobart at Hobart Financial.

“We seem to be looking at a pretty big cyclical bull right now and we’re going to see something like that lasting a while but what we’re looking at right now is a potential for domestic stocks to pull back within the next couple of weeks,” Hobart told CNBC.

In the short-term, investors should buy emerging market stocks. And longer-term, consider investing in the broader S&P market and sectors such as health care, suggested Hobart.

Meanwhile, Detrick said investors should keep an eye out for the volatility level (VIX) as an indication to buy.

“The 15-level is now considered the complacency level and everyone’s worried about it getting too low,” explained Detrick. “The last bull market, from 2003 to 2007, the VIX traded between 10 and 15—so 15 was actually high and that was a good buying opportunity.”

“Once the VIX can get beneath 15, which it will, that can be another thrust higher for the overall markets and should be a major positive.”

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Scorecard—What They Said:

  • Detrick's Previous Appearance on CNBC (Dec. 10, 2010)
  • Hobart's Previous Appearance on CNBC (Dec. 7, 2010)

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Market Views—Across the Board:

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CNBC Data Pages:

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CNBC Slideshows:

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Tuesday's Top Dow Laggards (as of this writing):

Caterpillar

American Express

Walt Disney

3M

McDonald's

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Disclosures:

No immediate information was available for Detrick or Hobart.

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Disclaimer