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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.

Brian Sullivan

Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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