Don't trust the Dow's 'golden cross': Belski

2016 year of second derivative investing: Brian Belski

A so-called "golden cross" appearing in the Dow Jones industrial average chart tends to give technical analysts confidence in an upcoming bull market rally. But Brian Belski, chief investment strategist at BMO Capital, is not convinced.

"It's so exciting that the technicians are bullish," Belski sarcastically told CNBC's "Worldwide Exchange" Wednesday, in reaction to the golden cross chart pattern. "These are the same people that were saying the world's coming to an end at 1,800" on the .

A golden cross occurs when the Dow's 50-day moving average trend line crosses above an ascending 200-day moving average.

Without calling technical analysis wrong, he said it's a "confirmation-affirmation" tool. "It tells you what way the market is going."

Regardless of a golden cross, according to Belski, we're headed for a "1995-type" environment, where portfolio managers like Peter Lynch and Warren Buffett flourished by sticking with solid companies.

"At the end of the day, you have to be a stock picker," Belski said. "We've been so dominated by macro investing, using quant things, economic stuff and technical stuff, we've forgotten how to pick stocks and manage portfolios."

Dow, other key stocks form bullish 'golden cross'

The Dow on Tuesday closed at its highest level since July 20.

Belski expects more positivity from markets but also some uncertainty with elections and commodities as wildcards.

"I think it's going to be a rinse-and-repeat situation between now and year end due to the uncertainty," Belski said. "We're gonna have a pullback, we're gonna have a rally, we're gonna have a pullback. It's a lot of indecision."

On earnings, he sees the large percentage of companies beating Wall Street expectations in the first quarter as a function of overly lowered estimates.

"Of course we were expected to decline, because we over-promise and over-deliver," Belski said. "Consensus has been wrong for seven years. So why are they going to be right now?"

As far as interest rates, Belski said investors should embrace any upcoming hikes and understand that if the Federal Reserve is raising rates, the economy's improving.

"If the economy's improving, the stock market should be improving," he said. "Rising interest rates are not the death of the bull market; rising interest rates are going to confirm the continuation of this bull market."

Yellen sends message won't 'upset apple cart': Pro

Fed policymakers are now pursuing less aggressive action on rate hikes than they indicated in December, scaling back projections of four increases in 2016 to just two. Central bankers raised rates for the first time in more than nine years in December.

Richard Clarida, global strategic advisor at Pimco, said the Fed's modified stance on the possible path for rates explains a shift in global sentiment and the recent turnaround in markets.

"They've sent out the message that they don't want to upset the apple cart," he told "Worldwide Exchange" in a separate interview. "We've had a shift in positive sentiment in global markets, [and] the Fed's not gonna hike too aggressively."

The weakening dollar, according to Clarida, has also been tied to the Fed's slower rate-hike cycle predictions.

"The strong dollar was a symptom of a weak global economy," Clarida said. "Now that the dollar has weakened somewhat, that's an indication of a better balance at the margin of a global economy, and also that's impacting the oil market."