The biggest selloff of the year hasn't dented the confidence of the Street's biggest bull.
The S&P 500 and Dow Jones Industrial average both fell more than 2 percent Thursday, marking the worst trading day for both indexes since February 2014. But Tom Lee, who has been one of the most bullish strategists on the Street for years, sees "positives in the market," and he's using the rare selloff as a buying opportunity.
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"I think the housing recovery trumps what is happening right now in energy," Fundstrat's founder said. Housing starts in July rose at a seasonally adjusted rate of 1.21 million to their highest level since October 2007 and marking the third time in four months that figure reached a new post-recession high. "Housing is big enough to move the needle and more than offset the energy-related downturn," he added. "There's still a lot of upside for housing equities."
Before Thursday's brutal selloff, the XHB homebuilders ETF, hit an eight-year high this week.
Lee also sees encouraging signs in the technicals in the market. According to his research, the percentage of stocks hitting 52-week lows as a percentage of total stocks hitting 52-week lows and 52-week highs is above 85 percent. Since 2002, stocks have rallied 94 percent of the time in the month after the measure has hit that level, by Lee's work.
"Sentiment right now is awful," said Lee. "It's been a really tough couple of weeks. But the reality is when you're not feeling comfortable that's usually a better time to buy than when you're feeling confident."