×

'Market is on a knife's edge,' time to buy protection: Trader

  • While the trend is still upward for the stock market right now, there are some "troubling signs" emerging, trader Keith Bliss told CNBC.
  • He thinks it would be wise to buy some insurance on the downside protection.
  • For Jeffrey Kleintop, emerging markets are the place to be.

While the trend is still upward for the stock market right now, the market is on a "knife's edge" and there are some "troubling signs" emerging, trader Keith Bliss told CNBC on Tuesday.

Those signs include the 10-year Treasury hitting its low of the year and gold at the year's high, the senior vice president of Cuttone & Company said.

"It would be wise for people to start thinking about buying some insurance on the downside protection a little bit more aggressively then they have been," Bliss said in an interview with "Closing Bell."

"If we think about the stock market being on the knife's edge, typically in those situations the market has a tendency to want to fall off the map quicker than it would be to rally up."

U.S. stocks closed lower on Tuesday, although the major large-cap indexes have recently been making new highs as people buy on the pullbacks.

Jeffrey Kleintop, chief global investment strategist at Charles Schwab, likes emerging market stocks. The market has been on fire, largely thanks to the weaker U.S. dollar, he said.

Plus, the leading indicator for world trade is pointing to the best trade numbers in about 10 years over the next few months, he said.

"Emerging markets are not showing any sign of slowing down. I think it's a good sign for the global economy," Kleintop told "Closing Bell."

He also thinks growth in Europe is peaking.

"Expectations have kind of aligned and we're more sideways in terms of steady growth there. U.S. could see a bit of a rebound here. That's maybe the more optimistic story," he said.

In that case, he would buy large-cap stocks over small caps because large caps have more exposure to rising international trade.

—CNBC's Fred Imbert and Melody Myers contributed to this report.

Disclaimer