'Fear of missing out' will drive markets: Technician

Stocks started a new week after closing out their third-straight week of gains, with the S&P 500 within 5 percent of its all-time high.

And according to one trader, the fears that gripped the market in August are now starting to subside.

"I really think the fear-driven mentality forced a lot of investors to shoot first, ask questions later," David Seaburg of Cowen & Co. said. "People derisked across the board."

Stocks have traded in volatile swings over the past couple months, amid uncertainty about the global economy, U.S. earnings growth and a sell-off in biotech, Seaburg said. Now investors are starting to reposition, which has helped stocks rise.

"We're looking at other sectors and wrapping our heads around the earnings that are coming out and probably realizing China is not going to have the impact that a lot of people feared," Seaburg said. You're seeing a totally different repositioning effect going on right now that could last a little while longer."

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And as previous concerns have faded, technician Katie Stockton of BTIG said a different fear could soon be driving the market.

"As you get into the fourth quarter, you have this fear of missing out that helps lift the market even higher than people would expect a move to," Stockton said Friday.

She said the S&P 500 has broken through significant resistance at 2,000 and she sees upside to 2,060, which would be another 1 percent gain for stocks.

"We saw follow-through on the back of that breakout, and really a whole lot of breakouts among individual stocks," she said. "You're seeing a lot of reversals here."

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Sara Eisen

Sara Eisen joined CNBC in December 2013 as a correspondent, focusing on the global consumer. She is co-anchor of the 10AM ET hour of CNBC's "Squawk on the Street" (M-F, 9AM-11AM ET), broadcast from Post 9 at the New York Stock Exchange.

In March 2018, Eisen was named co-anchor of CNBC's "Power Lunch" (M-F, 1PM-3PM ET), which broadcasts from CNBC Global Headquarters in Englewood Cliffs, N.J.

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