Dywer noted the market's weakness—in the financials and other cyclical areas—over the course of the last two months.
Typically, in a correction, he added, "money flows into the most liquid, larger-cap names, and then at the end, everything gets hit."
Six weeks ago, Dwyer had called for a correction of 5 percent to 10 percent, and he continued to expect a bit more of a selloff in the coming weeks.
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"If we think there's going to be 3 percent to 5 percent downside from here and have a 20 percent upside target, how can you possibly be bearish in that? You want to use that liquidity. It's kind of trying to invest smart versus looking smart. "
At 2,185, Dwyer's year-end target for the S&P is the highest on Wall Street.
"I'm telling people to buy," he said. "If you're looking out past the next six months, buy the next tick, buy next week's tick, buy next month's tick. It doesn't matter. I think the market's going to be significantly higher on the back of low inflation, still-steep yield curve and better availability of money, positive economy, positive direction of earnings and this magical thing that people have not bet enough on, which is valuation expansion."
— By CNBC's Bruno J. Navarro