Markets

The pause in the Trump rally should end soon, says strategist who recently sold his short-term positions

Key Points
  • Veteran strategist Jeffrey Saut sees a near-term stock market bottom.
  • "We've been in cautious mode" since the end of January, he says.
  • "I think people are profoundly under-invested," Saut argues.

As the Dow Jones industrial average tracks for its biggest monthly drop in 15 months, strategist Jeffrey Saut told CNBC on Thursday he's looking for a near-term stock market bottom.

Referring to his proprietary market timing model, Saut said: "My model ... got cautious at the end of January. We've been in cautious mode since then."

But the Raymond James chief investment strategist is getting ready to change his tune. "I'm actually looking for a bottom for the first time since we turned cautious at the end of January," he told "Squawk Box."

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At the beginning of last month, Saut sent a note to clients professing amazement about the strength of the postelection rally. "I have been in this business for over 46 years ... and I have never experienced anything like what is currently happening," he wrote.

As a result, he said, he sold 15 of his "short-term tactical positions" and said he was sitting things out until further notice.

Saut said at the time the positions he's holding remain 80 percent long on the market, reflecting his feelings that the current unpredictability will pass.

Since its all-time intraday peak on March 1, the Dow has declined nearly 3.4 percent as of Wednesday's close.

"Our models are starting to turn positive. We think you're trying to sink a bottom here," the long-term bull said Thursday.

"I think people are profoundly under-invested," said Saut, who's known for his "rip your face off-type rally" prediction in late 2015 after calling the August bottom a few months earlier.