One trader makes a case for buying stocks at record highs

Trading Nation: Stocks still a good buy?

The major U.S. indexes are trading at all-time highs, but if you're nervous the rally could soon stall, one trader insists it's not time to jump off the wagon just yet.

On CNBC's "Power Lunch" on Friday, managing director of FX strategy at BK Asset Management Boris Schlossberg said buying stocks right now is a smart move, as the markets are indicating that something positive is happening beneath the surface.

"There is actually a lot of historical evidence that buying at all-time highs is a good idea," said Schlossberg.

"I know it's kind of hard to chase, because as investors we are psychologically averse to chasing price, but generally when we break fresh new highs, that signals that there is something going on underlying … and there's usually continuation, and you want to join that move."

The markets opened slightly higher Monday morning; the Dow posted a new record high, surpassing its high last week of 18,638.34. The and Nasdaq composite broke previous intraday highs after the opening bell.

Despite Schlossberg's argument, some traders are more cautious about the recent moves.

According to Steve Grasso, managing director of institutional trading at Stuart Frankel, the last time these three indexes made tops like this, the market saw big sell-offs — 80 percent in the Nasdaq, 50 percent in the S&P, and about 40 percent in the Dow.

The markets' drops came after the Nasdaq, in 1999, "popped another 26 percent. We all know how it all ended. But ultimately, you did get that 26 percent pop," Grasso pointed out, referring to bullish trends upward before ultimately declining in light of the so-called dot-com "bubble" of the 1990s.

"I do like the momentum idea, but this market's been over-extended for so long now," Grasso said Friday on CNBC's "Power Lunch," adding the market, in his eyes, "seems a little bit too toppy."

Schlossberg added that if investors own stocks "for the long-term, it really doesn't matter; you should continue. If you're looking to kind of trade this, a kind of Solomonic compromise is to sell puts on this situation."

"In this case, if the stocks continue to run, you still make a little bit of money," said Schlossberg. "If it doesn't, if it does come in, at least you've gotten a better average price. You've bought the retrace."