Yellen just gave stocks the green light: Strategist

By cutting the outlook for rate hikes this year, Fed Chair Janet Yellen just put a fire hose to the volatility, says one Wall Street strategist.

"I'm shocked by Wednesday's statements and press conference because it's much more dovish than the market was expecting and I think that's going to keep the VIX at bay for now," Larry McDonald, managing director and head of global macro strategy at ACG analytics, told CNBC's "Trading Nation" on Wednesday.

In a news conference Wednesday afternoon Yellen said global economic and financial developments continue to pose risks to the U.S., and revised down her path for further interest rate increases.

"I think they have literally taken the fire hose out and kept it on, and I think that really shocked a lot of people," added McDonald.

Read MoreYellen: Negative interest rates not part of an active discussion

Yellen's comments sent stocks higher Wednesday as the CBOE Volatility index, commonly referred to as the market's fear gauge, hit a year-to-date low early in the session. The S&P 500 is currently tracking for its first positive month since November.

"I think right now we're in a period where the market is going to drift higher," David Seaburg said Wednesday, also on "Trading Nation.

According to Seaburg, with the central bank meetings behind us for now and the following catalyst for stocks being next earnings season, the markets could continue to gain momentum to the upside.

"I think we are in a period of very low volatility and a move higher will be the best-case scenario," said the head of sales trading at Cowen and Co. The official kickoff to the next earnings season is less than a month away.

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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