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Market signaling confusion: Strategist

After a disappointing January, stocks rallied on the first day trading in February. However, for strategist Sam Stovall, the January barometer should not be discounted.

In other words, what happens in January can foreshadow the rest of the year.

"In the down years, I think what it basically says, there is confusion. It's a confirmation of confusion rather than confidence," the managing director of U.S. equity strategy for S&P Capital IQ said in an interview with "Closing Bell" Monday.

In fact, the average price change in a down year has been a decline of an additional 7/10 of one percent for the remaining 11 months of the year, he noted.

That said, Stovall believes investors can get a good guide from the sectors and subindustries that did well in January.

Traders work the floor of the New York Stock Exchange.
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Traders work the floor of the New York Stock Exchange.

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Keith Bliss, a senior vice president at Cuttone and Company, is nervous about the equity market and expects its "temperamental nature" to continue.

"There's enough bad news out there to really make me suspicious," he said. "It's fun to trade if you have the guts and the fortitude to do it, but it's confusing to a lot of people."

He suggests investors ride out the volatility in some good defensive names and dividend-paying stocks.

However, Kelly Connelly, first vice president of investments for JHS Capital Advisors, said she sees a lot of money coming into the U.S. market.

She likes the strong dollar, which she said reflects a strong economy. She also said that those who think that the bull market will end just because it is in its sixth year are wrong.

"Bull markets don't really close on age, they close on recession. There is nothing in my opinion that is indicating a recession on the horizon," Connelly said.

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