Despite market jitters returning to send the Dow tumbling nearly 3 percent Tuesday, Fundstrat founder Tom Lee told CNBC he was preparing for a big upside swing.
"I think some things are underway now that are going to provide us the capability to make a pretty big move and therefore if you think a few months out this is going to prove to be a very good opportunity," Lee said during an interview with CNBC's "Power Lunch."
Pointing to performance in small caps and high-yield spreads, Lee saw comparisons to last year's late-October rally in which the Dow recovered about 10 percent of its value. In addition, market headwinds that have plagued energy companies and international corporations like cheap oil and a stronger dollar, respectively, could be letting up.
Seeing a weaker greenback returning in less than six months, Lee said, "What was really sort of a downside surprise becomes an upside surprise."
And while oil prices swung lower Tuesday, a recent rebound from breaking below $39 a barrel was a positive momentum indicator, Lee said.
"Last week, oil fell almost 60 percent on a year-over-year basis and that only happened two other times in the last 35 years," he said, adding that in both cases oil went on to rally in the year following.
"The fundamentals have to come together—there has to be a demand story and there has to be some visibility on production and supply, but it is encouraging."